Free Motion for Judgment - 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. ______________________________________________________________________________ MOTION FOR JUDGMENT ON THE BASIS OF THE DOCTRINE OF COLLATERAL ESTOPPEL ______________________________________________________________________________ Pursuant to the Court's April 27, 2006 Order, Defendant El Paso Properties, Inc. ("El Paso"), hereby moves the Court to enter judgment against Plaintiffs on the basis of the doctrine of collateral estoppel. As grounds therefore, El Paso states as follows: I. Introduction El Paso was served with the Complaint in this action on November 27, 2001. In the Complaint, Plaintiffs Sierra Club and Mineral Policy Center ("Plaintiffs") allege that El Paso is discharging pollutants from the El Paso shaft into the Roosevelt Tunnel, and that those pollutants flow down the Tunnel and into navigable waters of the United States in violation of the federal Clean Water Act. Plaintiffs have the burden of proving that pollutants in water at the El Paso shaft are transported over two and one half miles to the Roosevelt Tunnel portal and discharged into navigable waters (Cripple Creek, and, ultimately, the Arkansas River). See, Sierra Club v.

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El Paso Gold Mines, Inc., 421 F.3d 1133, 1146 (10th Cir. 2005), cert. denied sub nom. Sierra Club v. El Paso Properties, Inc., 126 S. Ct. 1653 (2006). In a separate action pending before this Court, these Plaintiffs alleged that parties other than El Paso were liable for discharging pollutants from the El Paso shaft into the Roosevelt Tunnel, and that those pollutants then flow down the Tunnel into navigable waters of the United States in violation of the federal Clean Water Act. See, Sierra Club v. Cripple Creek and Victor Gold Mining Co., Civ. No. 00-MK-2325 (MEK) ("the CC&V Case"); 421 F.3d at 1136, fn. 1. In that case, Plaintiffs claimed that the Cripple Creek & Victor Gold Mining Company and related entities (collectively "CC&V") were also liable for pollutants flowing through the same El Paso shaft at issue in this case because "[t]he surface features of the El Paso shaft are located within the current mine permit boundary" of CC&V. See, Exhibit 1 at 9 & 58.1 In support of their claim, Plaintiffs alleged that "[t]he El Paso shaft is the only man-made structure contributing flow into the Roosevelt Tunnel from the portal to the El Paso shaft." Id. at 58. The CC&V Case was litigated in a seven-day bench trial to District Court Judge Marcia Krieger between February 13, 2006 through February 22, 2006. On April 13, 2006, Judge Krieger entered judgment on the merits against the Plaintiffs on all claims in the CC&V case. See, Exhibit 2. With respect to the Roosevelt Tunnel, Judge Krieger ruled 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

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by each source." Id. at 23-24. Judge Krieger also ruled that "no evidence was presented to explain the significance of [] test results or from which the Court can determine whether the chemical constituents are naturally occurring or the result of human action." Id. at 24. II. Plaintiffs' Claims Are Barred by the Doctrine of Collateral Estoppel or Issue Preclusion. The doctrine of collateral estoppel, also known as issue preclusion, prevents a party from re-litigating issues that were actually decided in a prior action. Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979). The doctrine is broader than that of res judicata because it applies to claims for relief different from those litigated in the first action, but narrower in that it applies only to issues actually litigated. It protects litigants from the expense and vexation attending multiple lawsuits, conserves judicial resources and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions. Montana v. United States, 440 U.S. 147, 153-54 (1979). The Tenth Circuit has decided that, with limited exceptions, federal law should apply to questions of collateral estoppel involving prior federal judgments. Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 F.2d 1329, 1332 (10th Cir. 1988) (adopting RESTATEMENT (SECOND) OF JUDGMENTS); Murdock v. Ute Indian, Tribe of Uintah & Ouray Resv., 975 F.2d 683, 687 (10th Cir. 1992), cert. denied 507 U.S. 1042 (1993). The Tenth Circuit has held that unless the preclusion question involves some issue of state substantive law, such as privity
1

Exhibit 1 contains relevant excerpts of Plaintiffs' Proposed Findings of Fact submitted in Case 00-MK2325 on March 6, 2006. In the CC&V Case, Plaintiffs alleged multiple claims not relevant to these proceedings.

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between a present party and a party to the previous suit, federal law applies. Id. Here, the preclusion issues relating to the CC&V Case do not involve issues of state substantive law. Therefore, federal law applies. In the Tenth Circuit, issue preclusion requires that: (1) the issue previously decided is identical to the one presented in the action in question; (2) the prior action has been finally adjudicated on the merits; (3) the party against whom the doctrine is invoked was a party . . . to the prior adjudication; and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action. Murdock, 975 F.2d at 687 (quoting In Re Lombard, 739 F.2d 499, 502 (10th Cir. 1984)); Siemens Medical v. Nuclear Cardiology, 945 F. Supp. 1421 (D. Colo. 1996). The Supreme Court has noted that "once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation." Montana v. United States, 440 U.S. at 153; see also C.I.R. v. Sunnen, 333 U.S. 591, 599-600 (1948) (use of collateral estoppel "must be confined to situations where the matter raised in the second suit is identical in all respects with that decided in the first proceeding and where the controlling facts and applicable legal rules remain unchanged"). When determining whether collateral estoppel applies, a court must, examine the record of a prior proceeding, taking into account the pleadings, evidence, charge, and other relevant matter, and that the inquiry must be set in a

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practical frame and viewed with an eye to all the circumstances of the proceedings. Sealfon v. United States, 332 U.S. 575, 579 (1948). A. The Sierra Club and Mineral Policy Center are Party-Plaintiffs in the CC&V Case

El Paso must demonstrate that the parties against whom the doctrine of collateral estoppel is invoked, the Sierra Club and the Mineral Policy Center, were party to the prior adjudication or in privity with such a party. The concept of privity generally requires a substantial identity between the issues in controversy and a demonstration that the parties "are really and substantially in interest the same." See U.S. v. Power Engineering Co.,303 F.3d 1232, 1240 (10th Cir. 2002). The United States Supreme Court has held that a litigant who was not a party to the first case may nonetheless use collateral estoppel against a party who lost on the decided issue in the first case. Allen v. McCurry, 449 U.S. 90, 94-95 (1980); 46 Am. Jur.2d Judgments § 491. Here, it is undisputed that the Sierra Club and Mineral Policy Center are also plaintiffs in the case of Sierra Club v. Cripple Creek & Victor Gold Mining Co. (Civil Action No. 00-MK2325 D. Colo). In both cases, the Sierra Club and Mineral Policy Center are represented by the same legal counsel, John Barth. Finally, the organizational members that Plaintiffs relied upon to establish standing in each case are identical--Marilyn Fay and Kirby Hughes. See November 15, 2002 Memorandum Opinion & Order at 7 & Exhibit 2 at 3-4. B. After a Trial on the Merits in the CC&V Case, the District Court Determined That Plaintiffs Failed to Prove A Discharge of Pollutants from the El Paso Shaft into Navigable Waters.

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The Tenth Circuit has adopted provisions of the RESTATEMENT OF JUDGMENTS interpreting the doctrine of collateral estoppel. The RESTATEMENT OF JUDGMENTS suggests a number of factors that are relevant in determining whether an issue decided in a prior action is identical to an issue presented in a separate proceeding: Is there a substantial overlap between the evidence or argument to be advanced in the second proceeding and that advanced in the first? Does the new evidence or argument involve application of the same rule of law as that involved in the prior proceeding? Could pretrial preparation and discovery relating to the matter presented in the first action reasonably be expected to have embraced the matter sought to be presented in the second? How closely related are the claims involved in the two proceedings? RESTATEMENT (SECOND) OF JUDGMENTS § 27 cmt. c. Where these questions can be answered in the affirmative, it is likely that the issue involved in the two proceedings is the same. B-S Steel of Kansas, Inc. v. Texas Industries, Inc., 439 F.3d 653, 663 (10th Cir. 2006). In order to prevail on their claim against CC&V, Plaintiffs were required to prove: (1) a discharge (2) of a pollutant (3) into navigable waters (4) from a point source (5) without a permit. See Sierra Club v. El Paso Gold Mines, Inc., 421 F.3d at 1142. In both the instant case and the CC&V case, the alleged point source and navigable waters are identical--the Roosevelt Tunnel portal and Cripple Creek. In both cases, the pollutants are identical--zinc and manganese. In both cases, plaintiffs' claim of Clean Water Act liability was predicated on alleged proof of the same "discharge": the supposed flow of pollutants from the El Paso shaft into the Roosevelt Tunnel and then through the Roosevelt Tunnel and exiting from its portal. In both cases, the legal standards of proof and required procedures are identical. In both cases, the
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Plaintiffs requested the same relief: an injunction ordering the defendant to obtain a discharge permit, civil penalties and attorney's fees and costs. In its opinion remanding this case, the Tenth Circuit Court of Appeals noted that "[t]he opinions offered by Klco in the parallel litigation [the CC&V Case] were essentially identical to those offered here." 421 F.3d at 1151. The Tenth Circuit found that genuine issues of material fact existed regarding the claimed hydrological connection between the El Paso shaft and the Roosevelt Tunnel portal and regarding "the source of pollutants discharged at the portal." Id. at 1149-50. Moreover, the Tenth Circuit expressed doubt that Plaintiffs would be able to prove the hydrological connection necessary to prevail on their claims against El Paso. See, Exhibit 3 at 12 ("Even the Plaintiffs' strongest evidence - that water samples at the shaft and the tunnel portal (samples taken by Cripple Creek & Victor Mining Co.) both contain zinc and manganese - is less than convincing given the uncertainties by which the data were collected.").2 The Tenth Circuit correctly observed that the record in this case contains only two water samples taken at the El Paso shaft, and that "no samples link water from the El Paso shaft to water at the Roosevelt Tunnel portal." Id. at 2. The Tenth Circuit also pointed out that Colorado Administrative Law Judge Matthew Norwood had made similar "observations about the factual complexity of the tunnel geology" in parallel state administrative proceedings initiated by the Colorado Water Quality Control

2

On October 21, 2005, the Tenth Circuit issued an unpublished Order granting Plaintiffs' Petition for Panel Rehearing "for the sole and limited purpose of correcting the dates when water samples were taken from the Roosevelt Tunnel portal."

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Division. 421 F.3d at 1150 3. In particular, the ALJ found that "[CWQCD] has failed to prove that the zinc and manganese in the water coming out of the Roosevelt Tunnel portal has its origin in the El Paso Mine." Id. The ALJ specifically supported his findings by observing that "reliable measuring devices and other scientific tools have never been used to determine the flow of water in the Roosevelt Tunnel," and that no recording weirs, flumes or dye tracing tests had been employed to determine the origin of pollutants flowing out of the Roosevelt Tunnel portal. Id. The Tenth Circuit concluded that Mr. Klco, Dr. Maest and Mr. Burm were "silent" when it came to explaining "why the zinc levels drop so dramatically from the shaft to the portal." Id. On April 13, 2006, Judge Krieger ruled on the origin of pollutants in the Roosevelt Tunnel discharge in the CC&V Case after a trial on the merits. Judge Krieger's factual findings are consistent with statements made in the decisions of the Tenth Circuit and ALJ Norwood. Specifically, Judge Krieger held that these Plaintiffs: 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 at the subject locations. Thus, the Court has no evidence from which it can determine whether any pollutant has been added or discharged into the water. As a consequence, the Sierra Club has not proved that there has been a violation of the Clean Water Act. Exhibit 2 at 41. Judge Krieger further 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.

3

Exhibit 4 attached hereto is the April 21, 2003 Initial Decision entered by ALJ Norwood.

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The Plaintiffs' legal theory in both cases is based on the factual premise that zinc and manganese originating from the El Paso shaft are discharged through the Roosevelt Tunnel into Cripple Creek. The only difference between Plaintiffs' theories of liability in this case and the CC&V Case relates to nexus with the El Paso shaft. Plaintiffs argue in this case that El Paso is liable because it owns the shaft, and in the CC&V Case that the defendants are liable because the shaft lies within the CC&V mine permit boundary. This distinction in legal theories is inconsequential because Judge Krieger found as a matter of fact that the Plaintiffs failed to prove any hydrological connection between pollutants at the El Paso shaft and pollutants at the Roosevelt Tunnel portal. The factual issue presented in both cases is identical and it is a necessary element of proof for each of Plaintiffs' Clean Water Act claims. C. The Sierra Club and Mineral Policy Center Had a Full and Fair Opportunity to Litigate the Issue in the CC&V Case.

Under the collateral estoppel factors articulated by the Tenth Circuit, a litigant must have been given a full and fair opportunity to litigate the issue in a prior proceeding before collateral estoppel can be applied against it in a later proceeding. See Dodge v. Cotter Corp., 203 F.3d 1190, 1198 (10th Cir. 2000). The inquiry into whether a party had a full and fair opportunity to litigate an issue often focuses "on whether there were significant procedural limitations in the prior proceeding, whether the party had the incentive to litigate fully the issue, or whether effective litigation was limited by the nature or relationship of the parties." Sil-Flo, Inc., v. SHFC, Inc., 917 F.2d 1507, 1521 (citation omitted) (10th Cir. 1990).

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The Plaintiffs had ample opportunity to present evidence to prove the source of pollutants discharged at the Roosevelt Tunnel portal. The Plaintiffs raised the issue in their initial Complaint in the CC&V Case and asked Judge Krieger to find that CC&V was liable for the discharge pollutants flowing down the El Paso shaft, into the Roosevelt Tunnel, and out the Tunnel portal into Cripple Creek. The claim was asserted in briefs, oral argument and other pleadings submitted to the District Court. The Plaintiffs argued their position extensively. The District Court decided the issue against Plaintiffs. Moreover, it was reasonably foreseeable that Judge Krieger's decision would later have a preclusive effect on the merits of Plaintiffs' claims against El Paso. D. Judge Krieger's Ruling in the CC&V Case is a Final Judgment on the Merits for Purposes of Collateral Estoppel.

Counsel for Plaintiffs may argue that Judge Krieger's judgment is not "final" for purposes of collateral estoppel because the judgment has been appealed. However, the federal view 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"); 46 Am. Jur.2d Judgments § 528 (2006) ("The pendency of an appeal does not alter the preclusive effect of a judgment or order, whether the

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judgment or order is rendered by a trial court or an administrative agency, unless what is called an appeal actually consists of a trial de novo"). The federal rule is likewise embodied in the RESTATEMENT (SECOND) OF JUDGMENTS. Under the Restatement, "for purposes of issue preclusion, `final judgment' includes any prior adjudication of an issue in another action that is determined to be sufficiently firm to be accorded conclusive effect." RESTATEMENT (SECOND) OF JUDGMENTS § 13 (1980). Section 13 confirms that "a judgment otherwise final remains so despite the taking of an appeal unless what is called an appeal actually consists of a trial de novo." Id. at cmt. f and cmt g.. Since any appeal by the Plaintiffs will not constitute trial de novo, the rulings and judgment entered by Judge Krieger are final for purposes of collateral estoppel according to well-established federal jurisprudence. CONCLUSION WHEREFORE, El Paso respectfully requests that the Court enter an order granting judgment in favor of El Paso and against the Plaintiffs on all claims on the basis of collateral estoppel, and enter such other and further relief as may be just, fair and equitable. COMPLIANCE WITH D.COLO.LCivR 7.1(A) On June 26, 2006, counsel for El Paso conferred with Plaintiffs' counsel in a good faith effort to resolve the issues presented in this motion. Plaintiffs oppose the relief requested herein. Respectfully submitted this 30th day of June, 2006. _s/ Stephen D. Harris Stephen D. Harris MERRILL, ANDERSON, & HARRIS, LLC 20 Boulder Crescent
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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 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 [email protected] Roger Flynn, Esq. Jeffrey C. Parsons, Esq. Post Office Box 349 412 High Street Lyons, CO 80540 [email protected] [email protected]

s/ Sarah D. White Sarah D. White, Staff Assistant

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