Free Proposed Findings of Fact - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Case No. 00-cv-02325-MSK-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, vs. CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY, ANGLOGOLD ASHANTI (COLORADO) CORP. ANGLOGOLD ASHANTI NORTH AMERICA INC. and GOLDEN CYCLE GOLD CORPORATION Defendants. and Civil Action No. 01-cv-02307-MSK-MEH SIERRA CLUB and MINERAL POLICY CENTER, Plaintiffs, vs. CRIPPLE CREEK AND VICTOR GOLD MINING COMPANY, et al., ANGLOGOLD ASHANTI (COLORADO) CORP. ANGLOGOLD ASHANTI NORTH AMERICA INC. and GOLDEN CYCLE GOLD CORPORATION Defendants.

PLAINTIFFS' PROPOSED FINDINGS OF FACT

Plaintiffs Sierra Club and Mineral Policy Center hereby submit their Proposed Findings of Fact with regard to the trial on liability in this case. In support, Plaintiffs state the following:

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A. a)

FINDINGS OF FACT OF GENERAL APPLICABILITY The Cripple Creek & Victor Gold Mine ("mine" or "CC&V gold mine" is located in

Teller County Colorado between the towns of Cripple Creek and Victor. Exhibit ("Exh.") 295, Bates 4855. The mine is located within the Cripple Creek Mining District--an historic mining district. Exh. 295, Bates 4853. The mine is located at an average elevation of 9.900 feet. Exh. 295, Bates 4853. The CC&V gold mine is over 5,000 acres in size. Testimony of Scott Lewis, 2/13/06 at 13:7-9. Gold is obtained by extracting rock from the ground, separating the waste rock from the ore bearing rock, crushing the ore bearing rock, and recovering the gold by soaking the ore in a cyanide solution in the Valley Leach Facility ("VLF"). Exh. 295, Bates 4856; Exh. 514, p. 2. The CC&V gold mine is the largest active cyanide heap leach gold mine in Colorado. Exh. 514, p. 2. B. STANDING

Associational Standing: Members Have Standing to Sue in Own Right a) Kirby Hughes and Marilyn Fay are, and were when the lawsuit was commenced,

members of the Plaintiff organizations: Sierra Club and the Mineral Policy Center. Testimony of Kirby Hughes, February 22, 2006 ("Hughes Transcript") at 3:8-11; Testimony of Marilyn Fay, February 21, 2006 ("Fay Transcript") at 3:9-12. Exh. 8, Bates 00085 & 00088. b) The Sierra Club is a membership organization, and provides membership support

to its members, including Mr. Hughes and Ms. Fay. Exh. 521. Hughes Transcript at 3:19-4:9; Fay Transcript at 4:4-4:22.

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c)

The Mineral Policy Center allows for members under its by-laws, Exh. 520 at

515, §N, and provides membership support to its members, including Mr. Hughes and Ms. Fay. Hughes Transcript at 4:21-6:4; Fay Transcript at 5:16-6:3. Ms. Fay also testified that she expects the Mineral Policy Center would participate in permitting should the Court order Defendants to obtain permits at the unpermitted outfalls. Fay Transcript at 23:23-24:3. Interests at Stake are Germane to Organization's Purpose d) The interests of Sierra Club and Mineral Policy Center are environmental protection and

to minimize the environmental impacts of mining. Exh. 520; Exh. 521; Hughes Transcript at 6:8-18. Participation of Individual Members is Not Required e) The participation of Mr. Hughes and Ms. Fay is not required in order for the

requested relief to be obtained. Hughes Transcript at 6:5-7; Fay Transcript at 6:7-10. Injury In Fact: Concrete and Particularized Injury f) Mr. Hughes testified that he frequently travels up and down Shelf Road, conducts

tours of the area in his various mining roles for the Sierra Club, and participates in picnics and cookouts in the area. Hughes Transcript at 6:25-7:25. Ms. Fay testified that she used the watersheds with her children when they were younger and played in the water, and took pictures, played ball, picnicked, and viewed and photographed wildlife in the area. Fay Transcript at 9:6-18; 10:4-6. More currently, she testified that she takes visitors there, and directs her customers and other visitors there. Fay Transcript at 10:1811:11. 3

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g)

Mr. Hughes testified that he is aware of permit violations, contamination, unsightly

colors and dead vegetation at or near the Carlton Tunnel outfalls. Hughes Transcript at 8:1-9:13. He testified that his use of the area has been impacted, that he is unhappy with the unsightliness, and wants to picnic there less often. Hughes Transcript at 9:14-21. He also testified about the lack of a permit for, and the buildup of black sediment at, the Roosevelt Tunnel outfall. Hughes Transcript at 10:7-22. He testified that these conditions have deterred him from continuing with picnics or inviting friends to the area. Hughes Transcript at 10:14-20; 11:2-5. He testified that he has observed unpermitted discharges flowing from, and deposits on the wall of, the Moffat Tunnel Cribbing Wall. Hughes Transcript at 11:6-16. He is concerned that conditions there may not be healthy and testified that he has been deterred from getting close to the creek or enjoying the area for recreation. Hughes Transcript at 11:17-25. He further testified that conditions at, and the lack of a discharge permit for, Squaw Gulch Pond have deterred him from enjoying the area, or inviting friends, acquaintances, to spend much time there. Hughes Transcript at 13:3-10. Finally, Mr. Hughes testified that he knows about past cyanide releases at Arequa Gulch and that this knowledge has deterred his use of the area. Hughes Transcript at 14:22-25. h) Ms. Fay testified about her concerns related to the risk to humans, wildlife and the

environment. Fay Transcript at 12:16-17. She testified that she is aware of a goldish, brownish colored precipitate, and dead, sickly looking vegetation and trees, at the Carlton Tunnel discharge area. Fay Transcript at 14:24-25; 15:10-13. The lack of information concerning the discharges at the Carlton Tunnel ponds/waste rock seeps concerns her. Fay Transcript at 15:1916:3. She testified that the colored precipitate shows that the area is not as healthy as it should be and shows that the area is not being fully protected. Fay Transcript at 16:8-15. She testified 4

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about the black precipitate at the pipe flowing from the Roosevelt Tunnel and that the lack of a permit and monitoring makes her angry about the lack of information. Fay Transcript at 18:1-15. Ms. Fay testified about the crystalline-type substance on the Moffat Tunnel Cribbing Wall and that it causes her concern, both visually and due to the lack of information about it. Fay Transcript at 19:10-20:2. Ms. Fay testified that her enjoyment of the area around the Squaw Gulch Pond is diminished by not knowing what is in the pond, due to the lack of permitting. Fay Transcript at 20:16-21:20. Ms. Fay testified that she is aware of, and concerned about, cyanide violations of the Arequa Gulch permit. Fay Transcript at 22:15-25. Ms. Fay testified that overall, she does not enjoy the area as much as she used to because of the mining and water quality impacts. Fay Transcript at 23:1-13. The Injury Will Likely be Redressed by a Favorable Decision i) Both Mr. Hughes and Mr. Fay testified that they hope the Court will require permits for

the unpermitted discharges, and impose fines for the violations at permitted outfalls. Hughes Transcript at 15:1-15; Fay Transcript at 23:17-22; 24:6-14. Mr. Hughes testified that such a result by the Court would increase his picnicking, visitations and enjoyment of the receiving waters and surrounding areas. Hughes Transcript at 15:16-22. Ms. Fay testified that she would probably participate in permitting matters should the Court order Defendants to obtain permits through the Sierra Club and Mineral Policy Center. Fay Transcript at 23:23-24-1. j) Both Mr. Hughes and Ms. Fay testified that with more knowledge obtained by the

statutorily required monitoring and reporting and concurrent state oversight, they will have less concern about, and be more inclined to use, the resources. Hughes Transcript at 14:21-25; 15:18-22; Fay Transcript 23:17-20. They testified that penalties would deter future violations of 5

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pollution discharges, would likely result in more responsible behavior on the part of the Defendants, and ultimately cleaner creeks which they would use and enjoy more. Hughes Transcript at 15:9-18; Fay Transcript at 23:4-8; 23:20-23; 24:12-14. C. a) "OWNERS AND OPERATORS" UNDER THE CLEAN WATER ACT Defendant Cripple Creek & Victor Gold Mining Company ("CC&V") is a joint venture

between AngloGold Ashanti (Colorado) Corp. ("AngloGold Colorado") and Golden Cycle Gold Corporation ("GCGC"). Since at least September 1995, CC&V has owned and operated the Cresson Project in Teller County, Colorado which is a gold mining operation also known as the "Cripple Creek & Victor gold mine. Stipulation 4 Amended Final Pretrial Order. b) CC&V is governed by the terms of the Joint Venture Agreement and the laws of

Colorado. Stipulation 5 Amended Final Pretrial Order. Exh. 533. c) GCGC has a 33% interest in CC&V. Stipulation 3 Amended Final Pretrial Order. Exh.

533. GCGC attends joint venture management committee meetings. Exh. 80; Exh. 420. GCGC can vote on decisions made at management committee meetings. Exh. 533, p. 24. GCGC attends the joint venture technical committee meetings. Exh. 80; Exh. 421. GCGC was a party to the 2003 Colorado Water Quality Control Division ("WQCD") and United States Environmental Protection Agency ("EPA") Consent Agreements regarding some of the discharge locations at issue in this case. Exh. 57; Exh. 73. d) AngloGold Colorado has a 67% interest in CC&V. Stipulation 2 Amended Final Pretrial

Order. Exh. 533. AngloGold Colorado is the manager of CC&V. Stipulation 2 Amended Final Pretrial Order. AngloGold Colorado attends joint venture management committee meetings. Exh. 80; Exh. 420. AngloGold Colorado can vote on decisions made at management committee 6

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meetings. Exh. 533, p. 24. AngloGold Colorado attends the joint venture technical committee meetings. Exh. 80; Exh. 421. e) CC&V has owned and operated the Cresson Project from at least September 1995 to the

present. Exh. 373, Bates 5652, ¶4; Exh. 367, Bates 5525. CC&V is treated as a partnership under Colorado Uniform Partnership Act except as specifically limited pursuant to the Joint Venture Agreement. Exh. 373, Bates 5654, ¶15; Exh. 367, Bates 5527; Exh. 533. f) CC&V has no employees. Exh. 385. Testimony of Scott Lewis, 2/13/06 at 5:22-24.

AngloGold Colorado provides all employee services to the Joint Venture. Testimony of Scott Lewis. Exh. 385. The Joint Venture is composed of two partners--AngloGold Colorado and GCGC. Exh. 385. These corporations can only act through their officers and directors. Exh. 385. g) CC&V has conducted gold mining operations in the Cripple Creek Mining District since

1976. Exh. 295, Bates 4855. h) Under EPA policy, "discharges from mine adits at historic or active mines are point

sources and are required to have an NPDES permit if pollutants are being discharged to waters of the United States." Exh. 71, Bates 2203. "If the active mine owns or has control over an adjacent historic mining area, the active mine must also apply for an NPDES permit to control the discharge from the inactive area." Exh. 71, Bates 2205. i) Under WQCD policy, the following types of mine discharges must be authorized by

permits at "active or inactive sites": 1) "mine site process water discharges [which] originate from the area of disturbance which includes where...waste rock is stockpiled or disposed...adits...tailings ponds"; 2) "waters which percolate through the pile and discharge at 7

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the toe over an extended period of time or water which flows below the ground surface and later resurfaces are process water"; 3) "a discharge which comes into contact with any waste product...and then resurfaces, either naturally or as the result of pumping, draining or siphoning, is subject to federal guidelines and water quality standards"; 4) "discharge from the toe of the [waste] rock pile should also be subject to water quality standards." Exh. 56, Bates 2072-74. Ownership/Operation of the Carlton Tunnel Portal, Ponds, Waste rock i) CC&V owns the property upon which the portal of the Carlton Tunnel and the Carlton

Tunnel Ponds are located. CC&V also possesses a property interest in a portion of the area between the Carlton Tunnel Ponds and Shelf Road. Stipulation 46 Amended Final Pretrial Order. Exh. 373, Bates 5666, ¶66; Exh. 367, Bates 5540. j) The Carlton Tunnel portal and the Carlton Tunnel Ponds and a portion of the area

between the Carlton Tunnel Ponds and Shelf Road are included within the current boundary of MLRB Permit M-1980-244 for the Cresson Project. Stipulation 47Amended Final Pretrial Order. k) The Carlton Tunnel Permit CO-0024562 was included in the property that was conveyed

to the joint venture and was the subject of the Joint Venture Agreement. Exh. 533, P. IX-1. Arequa Gulch Outfall 001A, the underdrains, and the Valley Leach Facility l) The WQCD has issued to Defendant CC&V NPDES equivalent permits including permit

CO-0043648 (also known as the Cresson Project (1996) Permit). Outfall 001A as described in CDPS Permit CO-0043648 (1996) issued in 1996...is located within the current boundary of MLRB Permit M-1980-244 for the Cresson Project. Stipulation 57 Amended Final Pretrial

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Order. CC&V has an ownership interest in the property upon which Outfall 001A is located. Testimony of Scott Lewis, 2/15/06 at 28:24-29:2. The Squaw Gulch Pond m) Defendant CC&V has a property ownership interest in the property upon which the

Squaw Gulch Pond is located. Stipulation 21 Amended Final Pretrial Order. Since approximately January 25, 1999, the Squaw Gulch Pond has been located within the mine permit boundary of MLRB Permit M-1980-244 for the Cresson Project. Stipulation 23 Amended Final Pretrial Order. The Roosevelt Tunnel portal, the Roosevelt Tunnel, and the El Paso Mine and Shaft n) The Roosevelt Tunnel underlies certain properties and mineral interests of Defendant

CC&V and others. Stipulation 26 Amended Final Pretrial Order. CC&V property and mineral interests are listed on Exh. 412 and Exh. 417. Testimony of Jerry Bateman, 2/17/06 at 33:4-22; 35:20-25; 36:1-25; 37:1-25; 38:1-4; 39:1-25; 40:1-25; and 41:1-3. o) The surface features of the El Paso shaft are located within the current mine permit

boundary of MLRB Permit M-1980-244 for the Cresson Project. Stipulation 28 Amended Final Pretrial Order. CC&V requested permission from El Paso Gold Mines Inc. to include the El Paso Mine and shaft within the current mine permit boundary. Exh. 176, Bates 3703. p) On November 27, 2000 CC&V held an unpatented lode mining claim CMC No. 169659

known as the El Paso mining claim on the property upon which the Roosevelt Tunnel portal is located. Stipulation 30 Amended Final Pretrial Order. CC&V held the El Paso unpatented lode mining claim from at least September 1995 through 2001. Exh. 143, Bates 3548-51, 3558-59, 3561-63 & 3565. 9

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q)

From September 1995 to date, CC&V has also held the unpatented El Paso millsite claim

which is a separate claim also covering the Roosevelt Tunnel portal. Exh. 533. Testimony of Jerry Bateman, 2/17/06 at 29:18-25; 30:1-20. r) At various times from November 2000, CC&V has intermittently possessed a key to the

locked gate at the portal of the Roosevelt Tunnel. During the time CC&V held the unpatented El Paso mining claim, CC&V granted access, on occasion, across that claim to persons desiring to enter the Roosevelt Tunnel. Stipulation 31 Amended Final Pretrial Order. Exh. 155, Bates 3602; Exh. 172, Bates 3692. s) CC&V also owns the JJ#6 mining claim which covers the area surrounding the El Paso

shaft. Exh. 143, Bates 3565; Exh. 183; Exh. 417; Testimony of Jerry Bateman, 2/17/06 at 41:46; 42:11-14. t) In 1991-1992 Defendants conducted drilling and mining exploration work on the El Paso

mine property adjacent to the El Paso shaft. Exh. 149; Exh. 150; Exh. 213. Testimony of Jeff Pontius, 2/17/06 (Direct). The Moffat Tunnel portal property and the Moffat Tunnel Cribbing Wall u) Since approximately September 8, 2000, the Moffat Tunnel Cribbing Wall has been

located within the mine permit boundary of MLRB Permit M-1980-244 for the Cresson Project. Stipulation 22 Amended Final Pretrial Order. v) From at least 1998 to date CC&V has possessed a property interest in the Bush property

which includes the northern section of the Moffat Tunnel Cribbing Wall. Exh. 95, Bates 2955, 2962, 2967 & 2968; Exh. 23, Bates 437; Exh. 31, Bates 559; Exh. 708. Testimony of Jerry Bateman, 2/17/06 at 10:25; 11:1-25; 12:1-25; 25:22-25; 26:1-25; 27:1-8. From 1995 through at 10

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least August 26, 2003 CC&V also possessed the Golden Touch Mill Site claim and the Chief Crazy Horse Lode claim which cover the Moffat Tunnel Cribbing wall. Exh. 95, Bates 2954, 2957, 2961, 2965, 2967 & 2968; Exh. 143, Bates 3548-51, 3558-59, 3561-63 & 3565; Exh. 708. Testimony of Jerry Bateman, 2/17/06 at 13:11-17; 14:17-25; 15:1-20; 24:19-25; 25:1-25; 26:125; 27:1-12; 28:22-25; 29:1-3. From September 1995 to date CC&V has also owned the Maud S. (#9294) property which is located adjacent to and immediately north of the Bush property. Exh. 95, Bates 2956 and 2968; Exh. 533; Exh. 708. Testimony of Jerry Bateman, 2/17/06 at 16:23-25; 17:1-3; 19:13-25; 20:1-2. w) On June 8, 2001, there was a sign on the gate blocking the driveway to the Moffat Tunnel

portal property identifying the area as an active mining area owned by CC&V. Testimony of Scott Lewis. Exh. 2 photos 2B & 3B. AngloGold North America x) AngloGold Colorado is a wholly owned subsidiary of the corporation AngloGold Ashanti

North America Inc. ("AngloGold North America"). Stipulations 1 and 2 Amended Final Pretrial Order. AngloGold Colorado and AngloGold North America share the same corporate address. Stipulations 1 and 2 Amended Final Pretrial Order. AngloGold North America is the sole shareholder of AngloGold Colorado. Ex 378, Bates 5777. AngoGold North America shares the same officers and directors with AngloGold Colorado. Exh. 378, Bates 5781 & 5783; Bates 5784 & 5810, 5811. Officers, directors, and employees of AngloGold North America attend the joint venture management meetings and sign the minutes. Exh. 80, Bates 2687-88. Jerry Bateman, employee of AngloGold North America, is a participant and voting alternate of the joint venture management committee meetings. Exh. 423. Testimony of Jerry Bateman, 2/17/06 11

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at 3:22-25; 4:1-7. The joint venture management meetings include decisions regarding environmental issues at the CC&V gold mine, and more specifically, the discharge locations at issue in this case. Testimony of Herbert Hampton, 2/16/06 at 5:23-6:9. AngloGold North America attends the joint venture technical committee meetings and signs the minutes. Exh. 80, Bates 2666-67; Exh. 421, Bates 6556-6561. Scott Lewis, an environmental manager and employee of AngloGold North America, is the primary person in charge of permitting and compliance issues at all the discharge locations at issue in this proceeding. . Testimony of Scott Lewis, 2/13/06 at 7:20-8:7. On September 12 and 19, 2001 Scott Lewis participated in an inspection of the CC&V gold mine with the regulatory agencies in his position as environmental manager for AngloGold North America. Exh. 514, p. 2. See also, Exh. 247, Bates 4489 (listing Scott Lewis as AngloGold North America employee on May 18, 2001); Exh. 261 (listing Scott Lewis as an AngloGold North America employee on June 17, 2003. D. 1. ELEMENTS OF LIABILITY UNDER EACH CAUSE OF ACTION1 FIRST CAUSE OF ACTION-CARLTON TUNNEL SEEPAGE

1(a) DISCHARGE OF POLLUTANTS FROM THE CARLTON TUNNEL PONDS/WASTE ROCK INTO FOURMILE CREEK WITHOUT A PERMIT2 (1) "DISCHARGE" a) Currently flows from the Carlton Tunnel are directed through a series of settling ponds.

Stipulation 44 Amended Final Pretrial Order. Testimony of Scott Lewis, 2/13/06 at 34:23-35:8; Robert Burm, 2/22/06 at 14:25-25; 15:1-2; Ann Maest, 2/21/06 at 3:13-15; 2/16/06 at 11:11-13.
The numbering system for the proposed findings of fact with regard to elements of liability for each cause of action is the same as is used in Court Exhibit No. 1.
2 1

Defendants only specifically disputed the 1st, 2nd, and 3rd elements of liability.

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The five ponds contain approximately 1 million gallons of water. Testimony of Scott Lewis, 2/13/06 at 37:10-19. b) Water from the Fourmile Creek Springs was observed on September 12, 2001 to flow

into the roadside ditch along Shelf Road. Exhibit ("Exh.") 373, Bates 5672, #92 and Bates 5674, #98. c) A Colorado Department of Public Health and Environment reconnaissance inspection on

April 26, 2001 noted that seeps were occurring down gradient from the settling ponds and flowing over the surface of the ground and eventually into Fourmile Creek. Exh. 73, Bates 2276, ¶36. See also, Exh. 5. d) On September 12, 2001, EPA, the WQCD and Defendants representatives observed

seepage emanating from an area hydrologically down-gradient from the settling ponds and flowing over the surface of the ground into a ditch and eventually into Fourmile Creek. Exh. 73, Bates 2275, ¶ 33. e) Inspection reports by employees of WQCD document seepage from the Carlton Tunnel

wasterock dump on the following dates: June 19, 2000 at Exh. 511 ("seepage from the base of the impoundments"); April 26, 2001 at Exh. 5 ("observed 5-6 places where water was flowing from the base of the escarpment where the treatment ponds are located...it appeared to come out of the side of the hill about half the way up"); June 20, 2001 at Exh. 512 ("water seeping from embankment"); May 19, 2003 at Exh. 513 ("seeps"); June 22, 2005 at Exh. 515 ("water seeping from the Carlton Tunnel settling ponds embankment was viewed. Several seeps emerge from the embankment above Shelf Road. These seeps have been referenced as Fourmile Creek Springs. The water flows into the effluent channel via the Shelf Road drainage ditch"). 13

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f)

On February 24, 2003 the State of Colorado and CC&V, AngloGold (Colorado) Corp.

and Golden Cycle Gold Corporation entered into a Consent Agreement in which the State of Colorado concluded that "seepage from the Carlton Tunnel Ponds into Fourmile Creek constitutes an unpermitted discharge of pollutants from a point source into waters of the State." Exh. 57, Bates 2079, ¶8. g) During an inspection on September 19, 2001, employees of the EPA found that "seeps

were observed along Shelf Road below the Carlton Tunnel ponds...seeps collect in a road side ditch eventually joining the discharge to the Carlton Tunnel Ponds...eventually into Fourmile Creek"). Exh. 514. h) On April 2, 2001 the EPA issued a Notice of Violation to the WQCD, CC&V,

AngloGold (Colorado) Company, and GCGC indicating that "seeps are emanating from the settling ponds located at the Carlton Tunnel and reaching Fourmile Creek." Exh. 535 and Exh. 536. i) On September 29, 2004, the Plaintiffs and Defendants conducted a joint inspection of the

Carlton Tunnel portal area, including the waste rock dump. Testimony of Ann Maest, 2/21/06 at 2:15-17 and 25; 3:1-5 and 13-18; Lawrence Myers, 2/16/06 at 16:2-9; and Scott Lewis, 2/14/06 at 23:9-12. Seepage was emerging from the rock located on the face of the waste rock dump. Testimony of Ann Maest, 2/21/06 at 6:2-20; 7:17-25; 12:20-25; 13:1-17; and Lawrence Myers, 2/16/06 at 16:2-25.,. Exh. 1 (videotape segment taken by Ann Maest of 9/29/04 inspection); Exh. 2, photos 17HH and 18HH of 9/29/04 inspection. A water quality sample of this seepage was collected on that date. Testimony of Ann Maest, 2/21/06 at 10:18-25; 11:1-25; 14:9-21; Lawrence Myers, 2/16/06 at 16:2-9; and Scott Lewis, 2/14/06 at 24:25-25:1. The September 29, 14

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2004 water quality results for this seepage ("CTSA") is found at Exh. 565, p. 1 and reveals the presence of zinc, nickel, cadmium, uranium, cobalt, arsenic, aluminum, calcium, magnesium, and other constituents. Exs. 565, 305 and 252;Testimony of Scott Lewis at 25:18-21; and Testimony of Ann Maest 2/21/06 at 16:1-25; 17:1-8 and 18-25; 18:1-11. j) From January 1996 through at least May 2003 employees of Defendant AngloGold

(Colorado) Corp. made observations of seepage from the Carlton Tunnel Ponds and/or waste rock. Exs. 190; 701. Testimony of Scott Lewis, 2/14/06 at 40:2-13 and 47:24-25 and Lawrence Myers, 2/16/06 at 8:19-25; 9:1-24; 11:1-25; 12:1-5 and 17-24; 13:1-20; 15:21-25; 16:1-25; 17:119; 18:24-25; 19:1. AngloGold Colorado employee Lawrence Myers made contemporaneous recordings of the location "seepage at the Carlton Tunnel ponds" as it emerged from the waste rock pile (Exh. 190, Bates 3925); noted on February 12, 1996 that the "ponds or trough or both leak like a sieve" (Exh. 190, Bates 3932); noted on December 3, 1996 that there was flow at the "middle of pond" and at the "west French drain" which was a man-made conveyance structure installed by CC&V to collect and convey seepage below the Carlton Tunnel ponds (Exh. 190, Bates 3957); on April 3, 1997 noted that the ditch along Shelf Road was "collecting pond seepage" (Exh. 190, Bates 3958); and, on October 3, 2000 noted flow at "toe of dump" (Exh. 190, Bates 3964) just six weeks before this case was filed. k) Employees of Defendant AngloGold Colorado measured the flow volume of seepage

below the Carlton Tunnel ponds on at least the following occasions and documented the following volumes of flow: -2/12/96 Exh. 190, Bates 3926--200 gpm & 29.2 gpm; -2/20/96 Exh. 190, Bates 3932 "combined flow of seeps 714 gpm". See also Exh. 252; 15

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-2/29/96 Exh. 190, Bates 3937 "combined flow of leaks 382 gpm"; -3/18/96 Exh. 190, Bates 3946 "combined CT seep 234 gpm"; -3/22/96 Exh. 190, Bates 3949-50 "combined seep flow about 230 gpm"; -3/26/96 Exh. 190, Bates 3951 "seep flow 232 gpm"; -4/18/96 Exh. 190, Bates 3953 west flow 7 gpm and east flow 206 gpm; -9/12/96 Exh. 190, Bates 3956 "west culvert on county road (pond leak) perf. Pipe installed and backfilled" flow at 3.8 gpm (See also Exh. 2, photo 23BB and Testimony of Robert Burm, 2/22/06 at 16:17-16 and Lawrence Myers, 2/16/06 at 9:19-25; 10:1-2). - 10/3/96 Exh. 190, Bates 3954 "west French drain" 4.28 gpm; -12/3/96 Exh. 190, Bates 3957 "west French drain 3gpm" and "middle of pond 50-70 gpm"; -4/3/97 Exh. 190, Bates 3958 "collecting pond seepage 30 gpm"; -10/3/00 Exh. 190, Bates 3964 flow at dump "pond toe" 80 gpm". See also Exh. 252; -11/16/00 Exh. 247, Bates 4490-93 flow at CT-E and CT-F at 31 gpm and 29 gpm. See also Exh. 190, Bates 3966-68 and Exhibit 252; -4/27/01 Exh. 252, flow at 59.02 gpm; -1/23/03 Exh. 190, Bates 3979 flow at CT-E of 27.6 gpm; and, -5/6/03 Exh. 190, Bates 3983-84 flow at CT-J of 8 gpm and at CT-F = 51 gpm. l) Employees of AngloGold Colorado, including Lawrence Myers, measured flow from the

2' flume located before the Carlton Tunnel ponds and from the 9" flume located after the Carlton Tunnel ponds. Testimony of Lawrence Myers, 2/16/06 at 13:21-25; 14:1-25; 15:1-6. Mr. Myers recorded the following loss of water flow across the ponds on the following days: 16

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-2/20/96, Exh. 190, Bates 3936, 1708 gpm before ponds and 425 gpm after ponds. -3/4/96, Exh. 190, Bates 3939, 1668 gpm before ponds and 610 gpm after ponds. -3/6/96, Exh. 190, Bates 3942, 1667 gpm before ponds and 600 gpm after ponds -3/18/96 Exh. 190, Bates 3944, 1667 gpm before the ponds and 902 gpm after the ponds -3/22/96, Exh. 190, Bates 3949, 1625 gpm before the ponds and 948 gpm after the ponds. -4/2/96, Exh. 190, Bates 3952, 1541 gpm before the ponds and 964 gpm after the ponds. m) On February 14, 1996 AngloGold Colorado employee John Hardaway wrote a letter to

the WQCD noting the "porous nature of the fill material on top of which all of the ponds are located." Mr. Hardaway stated that "we have placed clay in all of the ponds and along the distribution channel to enhance retention. Nonetheless, there will be seepage from the ponds, as there has been in the past." Exh. 239. In a letter to WQCD on November 1, 1996, Mr. Hardaway also admitted "a possible decrease in flow rates across the ponds...it is likely that some minor amount of the tunnel flow water does reach the discontinuous perched groundwater system appearing to exist parallel to Fourmile Creek". Exh. 290, Bates 4795-96. Mr. Hardaway also noted that "CC&V has no ground-water studies for the area and has no basis to describe the hydrology beyond what has been visible to the Division in its many visits." Exh. 290, Bates 4796. n) On June 9, 2003 CC&V submitted a permit application to the WQCD for seepage from

the Carlton Tunnel ponds and/or waste rock dump that they referred to as the "Fourmile Creek Springs." Exh. 250. The permit application contained flow and water quality data for sampling locations CT-F (the seepage flowing east in the ditch approximately 15 feet upgradient of the confluence of the Carlton Tunnel main flow (see Exh. 226; Exh. 247 Bates 4492) and CT-J (the

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seepage flowing west toward the west culvert adjacent to Shelf Road) (Testimony of Scott Lewis 2/14/06 at 38:3-14. Exh. 250, Bates 4542-4551). o) In their February 1, 2001 response to the EPA's CWA Section 308 request for

information, the Defendants stated "CC&V has been unable to locate any construction specifications, pond dimensions, lining and compaction specifications, or seepage rate testing results for any of the four original ponds". Exh. 71, Bates 2235. Defendants' response also discussed the addition of a fifth pond between January and March 1996 and stated that "[c]onstruction, lining, and compaction specifications are not available for this work". Exh. 71, Bates 2235. The lack of such information is also confirmed in a WQCD inspection report dated June 20, 2001. Exh. 512, p. 3. The Defendants also stated in their response to the EPA request for information that, "the only other maintenance that CC&V is aware of relates to removal of accumulated solids and vegetation from the channel between the portal and the ponds during August 1998". Exh. 71, Bates 2236. Defendants did not identify any other remedial actions taken between March 1996 and November 27, 20000 to address the violations of the Carlton Tunnel Permit CO-0024562 during that time period. Exh. 71, Bates 2238-39. The trial testimony of Scott Lewis, environmental manager for the mine, confirmed that the Defendants did not take any remedial actions between March 1996 and November 27, 2000 to completely eliminate the cause of the pond/waste rock seepage, or the TSS, flow, zinc, and WET permit violations alleged by Plaintiffs at Carlton Tunnel Outfall 002. Testimony of Scott Lewis, 2/14/06 at 47:13-17. p) The WQCD has promulgated written policy WQP-17 regarding the Definition of Process

Water and Stormwater at Non-Coal Mining Sites. Exh. 56, Bates 2072-74. This policy states 18

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that "waters which percolate through the [waste rock] pile and discharge at the toe over an extended period of time or water which flows below the ground surface and later resurfaces are process water" subject to NPDES permitting at hard rock mine sites. q) The EPA has a written policy governing NPDES Permit Issues at Hard Rock Mines.

Exh. 71, Bates 2203-2212. This policy states "seeps and other ground water discharges hydrologically connected to surface water from mines, either active or abandoned, are discharges from point sources and are subject to regulation through an NPDES permit. Current EPA policy, as augmented by several lawsuits, indicates that it is more the mine or facility itself that is subject to NPDES regulations. Therefore, any seeps coming from identifiable sources of pollution (i.e., mine workings, land application sites, ponds, pits, etc.) would need to be regulated by discharge permits". Exh. 71, Bates 2204. 2) a) "OF A POLLUTANT" Samples of water in the vicinity of and lower in elevation than the Carlton Tunnel Ponds

were taken on February 20, 1996, November 16, 2000, and March 22, 2001. Stipulation 61 Amended Final Pretrial Order. See also Exh. 373, Bates 5671 #90. b) Water quality samples of seepage from the Carlton Tunnel ponds and/or waste rock pile

were taken by Defendants' representatives on February 20, 1996, October 3, 2000, November 16, 2000, March 22, 2001, and April 27, 2001 and reveal the presence of zinc, copper, chromium, aluminum, sodium and/or magnesium. Exh. 252. c) Plaintiffs and Defendants conducted a site inspection of the seepage from the Carlton

Tunnel ponds/waste rock on September 29, 2004. A water quality sample was collected as seepage emerged from the waste rock and this sample was split between the Plaintiffs and 19

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Defendants. Testimony of Ann Maest, 2/21/06 at 15:12-14; and Lawrence Myers, 2/16/06 at 16:2-9. Each party conducted a water quality analysis of their water quality sample. The Defendants' sample revealed the presence of aluminum, sodium, magnesium, and other constituents. Exh. 305. The Plaintiffs' sample revealed the presence of zinc, nickel, copper, cadmium, uranium, cobalt, arsenic, aluminum, sodium, magnesium, and other constituents. Exh. 565, page 1. d) EPA conducted water quality sampling of the seepage from the Carlton Tunnel

ponds/waste rock ("seep 1" and "seep 2") on September 19, 2001. Exh. 514 and Testimony of Scott Lewis, 2/13/06 at 17:2-9 and 2/14/06 at 47:3-6. This water quality sample was split with representatives of the Defendants. Testimony of Scott Lewis, 2/13/06 at 17:5. EPA's analytical results revealed the presence of arsenic, cadmium, manganese, nickel, and zinc. Exh. 514, p. 11. The Defendants' water quality sample results revealed the presence of iron, magnesium, and sodium. Exh. 224, Bates 4297-98. e) On June 8, 2004 Plaintiffs collected water quality samples of seepage from the Carlton

Tunnel ponds/waste rock ("Carlton Pond Seep #1" and "Carlton Pond Seep #2"). Exh. 137 and Testimony of Ann Maest, 2/21/06 at 22:5-14; 23:3-19. The water quality sampling results revealed the presence of iron, magnesium, sodium, arsenic, cobalt, uranium, aluminum, and manganese. Exh. 137, Bates 3500-01. f) EPA has promulgated regulations listing arsenic, cadmium, chromium, copper, cyanides,

nickel, and zinc as "toxic pollutants" under the CWA. 40 C.F.R. §401.15. g) In its February 2003 Consent Agreement with the Defendants, the EPA determined that

the sodium, magnesium, and manganese found in the Carlton Tunnel pond/waste rock seepage 20

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were "pollutants" as that term is defined under Section 502(6) of the Clean Water Act. Exh. 73, Bates 2276, ¶ 35.3 3) a) "INTO NAVIGABLE WATERS" Plaintiffs incorporate herein by reference findings of fact for Claim 1(a), element 1,

paragraphs c, d, f, g & h above. b) From at least September 1995 to the present, water flow containing chemical constituents

has generally flowed past Outfall 002 as described in CDPS Permit No. 0024562 and flowed into Fourmile Creek. Stipulation 48 Amended Final Pretrial Order. c) At least some of the seepage from the Carlton Tunnel ponds/waste rock flows into a road

side ditch along Shelf Road, combines with the flow from Outfall 002, and then flows into Fourmile Creek. Testimony of Ann Maest, 2/21/06 at 8:2-25; 9:1-6; Scott Lewis, 2/14/06 at 37:13-20, Lawrence Myers, 2/16/06 at 8:16-25; 9:1-25; 10:1-2; and Robert Burm, 2/22/06 at 15:5-17. d) The WQCD has issued a permit to CC&V for the discharge from Outfall 002 at the

Carlton Tunnel into Fourmile Creek. Exh. 237. Thus, the WQCD has determined that Fourmile Creek is a "navigable water" for purpose of NPDES permitting.4

Defendants are collaterally estopped from challenging this determination because the issue was finally decided by EPA in a judgment on the merits, Defendants were parties to that proceeding or in privity with parties to that proceeding, the issue being challenged in this proceeding is the same as was decided in the 2003 Consent Agreement, and Defendants had a full and fair opportunity to litigate the issue. See, Order dated March 12, 2004. See also, Matosantos Commercial Corp. v. Applebee's Int'l, Inc., 245 F.3d 1203, 1209 (10th Cir. 2001). 4 The Defendants may not challenge this fact because it was resolved by the WQCD during the permitting process for the 1992 Carlton Tunnel permit CO-0024562. Defendants did not challenge that permit. Thus, Defendants may not collaterally challenge that permitting determination in this enforcement action. See, 33 U.S.C. §1369(b)(2). See also, United States v. Saint Bernard Parish, 589 F.Supp. 617, 619 (E.D. La. 1984); PIRG v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 77-83 (3rd Cir. 1990) cert. denied 489 U.S. 1109 (1991).

3

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e)

In the 2003 Consent Agreement with some of the Defendants, the EPA determined that

Fourmile Creek is a "water of the United States within the meaning of 40 C.F.R. §122.2 and therefore a `navigable water' within the meaning of section 502(7) of the Act. 33 U.S.C. § 1362(7)".5 f) Defendants admit that: 1) Squaw Gulch, Arequa Gulch, Cripple Creek and Fourmile

Creek are tributaries of the Arkansas River, Exh. 373, Bates 5657; 2) the WQCD has issued NPDES equivalent permits for discharges into Arequa Gulch, Cripple Creek and Fourmile Creek, Exh. 373, Bates 5657; 3) the Arkansas River is an interstate river, Exh. 373, Bates 5658; 4) the State has adopted water quality standards and classifications for Fourmile Creek, Cripple Creek, Arequa Gulch, and Squaw Gulch, Exh. 373, Bates 5659. 4) a) "FROM A POINT SOURCE" Plaintiffs incorporate herein by reference findings of fact for Claim 1(a), element 1,

paragraphs a, c, d, e, f, g, h, I, j, k, m, p, and q above. b) The portal of the Carlton Tunnel is a point source as that term is defined in Section

502(14) of the Clean Water Act. Stipulation 49 Amended Final Pretrial Order. c) Defendants admit that the Carlton Tunnel waste rock dump is an "underground

development rock pile. Exh. 71, Bates 2236. Defendants admit that this pile was created from the construction of the Carlton Tunnel. Exh. 250, Bates 4528. The Carlton Tunnel ponds were

"constructed in the rock material that was in place at the time." Exh. 290. d) CC&V submitted a NPDES permit application to the EPA in 1981 in which it referred to

the Carlton Tunnel "waste rock dump". Exh. 235, Bates 4368. CC&V constructed the ponds in
5

See footnote 3 which is incorporated herein by reference.

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the Carlton Tunnel waste rock material. Exh. 235, Bates 4368. Representatives of Defendants also submitted a diagram of the Carlton Tunnel area to the WQCD which referred to the "existing dump". Exh. 291, Bates 4801. e) CC&V installed a man-made perforated pipe to convey seepage from the Carlton Tunnel

ponds/waste rock to the west culvert under Shelf Road. Testimony of Lawrence Myers, 2/16/06 at 8:16-25; 9:1-25; 10:1-2; Robert Burm, 2/22/06 at 16:7-16. Exh. 2, photo 23BB, Exh. 190, Bates 3956 ("west culvert on county road (pond leak) perf. pipe installed and backfilled" flow at 3.8 gpm). f) The CC&V Joint Venture Agreement defines "waste dump" as a "location where

overburden and waste rock ...are disposed". Exh. 533, Exhibit G, p. 4. g) There is no seepage visible above the ponds or on either side of the Carlton Tunnel waste

rock dump. Instead, all seepage is emerging from the waste rock dump directly below the Carlton Tunnel ponds. Testimony of Ann Maest, 2/21/06 at 9:14-25; 10:1-17; 22:19-25; Robert Burm, 2/22/06 at 15:23-25; 16:1-11; and Lawrence Myers, 2/16/06 at 8:19-25; 9:1-24; 11:1-25; 12:1-5 and 17-24; 13:1-20; 15:21-25; 16:1-25; 17:1-19; 18:24-25; 19:1. h) In the 2003 Consent Agreement, EPA determined that "the seeps constitute a point source

as that term is defined in Section 502(14) of the Act".6 i) The WQCD has required an NPDES permit for seepage from the toe of a waste rock pile

at an inactive hard rock mine. Exh. 51, Bates 1965, 1980 & 1991. 5) "W/OUT PERMIT"

6

See footnote 3, which is incorporated herein by reference.

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a)

As of February 13, 2006 (the first day of trial) Defendants did not have a permit to

discharge seepage from the Carlton Tunnel ponds/waste rock. Testimony of Scott Lewis, 2/14/06 at 43:2-6. Defendants have also admitted that as of October 28, 2004 they "do not possess a NPDES permit for the Fourmile Creek Springs." Exh. 373, Bates 5674, #99; Exh. 367, Bates 5548. b) In its 2003 Consent Agreement with some of the Defendants, the EPA determined that

the "seeps are not permitted". Exh. 73, Bates 2276, ¶38. 6) a) "ONGOING VIOLATIONS" Plaintiffs incorporate herein by reference findings of fact for Claim 1(a), element 1,

paragraphs b, c, d, e, f, g, h, i, j, k, m; and, element 5, paragraphs a and b. b) Unpermitted seepage from the Carlton Tunnel ponds/waste rock has occurred both before

and after the date the complaint was filed in this case. See, paragraph a above. c) In the Amended Final Pretrial Order, Defendants did not plead the "upset defense" as an

affirmative defense to the Carlton Tunnel pond/waste rock seepage.

1(b) VIOLATION OF CONDITION IN CARLTON TUNNEL PERMIT PROHIBITING ANY DISCHARGE TO WATERS OF THE STATE FROM A POINT SOURCE OTHER THAN SPECIFICALLY AUTHORIZED BY THE PERMIT 1) a) "A DISCHARGE PERMIT WAS ISSUED TO DEFENDANTS" The WQCD has issued to Defendant CC&V NPDES equivalent permit CO-0024562

(also known as the Carlton Tunnel permit). Stipulation 40 Amended Final Pretrial Order and Exh. 237. 2) "PERMIT CONDITION PROHIBITING DISCHARGES" 24

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a)

The Carlton Tunnel Permit contains a condition prohibiting any discharge to waters of

the State from a point source other than specifically authorized by the permit. Exh. 237, Bates 4418 ¶10. 3) "DEFENDANTS DISCHARGED TO WATERS OF THE STATE FROM A POINT SOURCE NOT SPECIFICALLY AUTHORIZED IN THE PERMIT" a) b) Plaintiffs incorporate herein by reference all elements and paragraphs for Claim 1(a). In the 2003 Consent Agreement with some of the Defendants, EPA determined that

"CDPS Permit CO-0024562 does not allow Respondents to discharge effluent from the Carlton Tunnel at a location other than Outfall 001 and 002. Exh. 73, Bates 2275 ¶ 32.7 4) a) b) "ONGOING VIOLATIONS" Plaintiffs incorporate herein by reference all elements and paragraphs for Claim 1(a). In the Final Pretrial Order, Defendants did not plead the "upset defense" as an affirmative

defense to the Carlton Tunnel pond/waste rock seepage. 2) 1) a) 2) a) SECOND CAUSE OF ACTION-CARLTON TUNNEL FLOW8 "A DISCHARGE PERMIT WAS ISSUED TO DEFENDANTS" Plaintiffs incorporate herein by reference all paragraphs in element 1 for Claim 1(b). "THE PERMIT HAD EFFLUENT LIMITATIONS FOR FLOW" The Carlton Tunnel permit has a condition limiting flow to 2.58 million gallons on a 30

day average. Stipulation 52 Amended Final Pretrial Order. Exh. 237, Bates 4394. 3) "THE FLOW LIMIT WAS EXCEEDED"

7 8

See footnote 3, which is incorporated herein by reference. Defendants only challenge element 1 (as it applies to "all defendants") and element 4 of this cause of action.

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a)

CDPS Permit CO-0024562 requires the permittee CC&V to submit discharge monitoring

reports ("DMRs"). Stipulation 50 Amended Final Pretrial Order. b) According to DMRs, the 30 day average flow number in permit CO-0024562 for Outfall

002 was exceeded in September, October, November, December 1995; January 1996; and June 1999. Stipulation 52 Amended Final Pretrial Order and Exh. 243. c) In the Amended Final Pretrial Order, Defendants did not plead the "upset defense" as an

affirmative defense to the Carlton Tunnel Outfall 002 flow exceedences, or any other exceedence. As per the terms of the Carlton Tunnel permit, the upset defense is an affirmative defense for which the permittee bears the burden of proof. Exh. 237, Bates 4417. Any determination by WQCD during administrative review of an upset request is not final agency action. Exh. 237, Bates 4417. The WQCD and EPA both brought enforcement actions in 2003 for violations that Defendants claimed in 1999 were excused under the upset defense. Exh. 57; Exh. 73. d) In the 2003 Consent Agreement with some of the Defendants, the EPA determined that

certain flow exceedences of the Carlton Tunnel permit constituted a violation of the Clean Water Act. Exh. 73, Bates 2274. 4) a) "ONGOING VIOLATIONS" The Defendants did not take any action between June 1999 and November 27, 2000 to

completely remediate the cause of the flow exceedences alleged by Plaintiffs. Testimony of Scott Lewis, 2/14/06 at 16:6-10. The addition of the fifth pond in January 1996, which predated the last reported flow exceedence, was not specifically designed to remediate the flow violations at Carlton Tunnel Outfall 002. Testimony of Scott Lewis, 2/14/06 at 15:18-16:5. Instead of 26

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installing additional treatment systems in response to the violations, Defendants determined that such treatments systems were "unnecessary" because they were asserting the "upset defense" to these violations--a defense not specifically plead in the Amended Final Pretrial Order in this case. Exh. 71, Bates 2237-39. b) In addition to the flow violations from September 1995 through June 1999 as alleged by

Plaintiffs, Defendants also had flow exceedences in July and August 1995 and in May, June, July 1994, Stipulation 52 Amended Final Pretrial Order. Exh. 278, Bates 4683, 4686-87, and 468991. c) In letters to the WQCD, representatives of the Defendants stated that they "do not control Exh. 291,

the discharge" and "the flow from the tunnel is beyond our capacity to control."

Bates 4804 and 4807. Representatives of the Defendants have also described the zinc and flow exceedences as a "yearly pattern where we see the levels rise in the summer months. Last year's peak was in May. The zinc levels go up as the flow out of the Carlton Tunnel increases." Exh. 291, Bates 4807. Representatives of the Defendants also describe the flow exceedences as an "expected pattern of behavior in the tunnel discharge." Exh. 291, Bates 4807. In 1995, representatives of the Defendants stated that no one at the company "knows of any practical way of moderating these parameters [flow]". Exh. 421, Bates 6546. Despite admitting to the yearly seasonal exceedences of flow and zinc, the Defendants did not take any actions to completely eliminate the cause of these violations before November 27, 2000. d) In their Motion to Dismiss this action filed in May 2001, Defendants represented to this

Court that the "treatment ponds were not designed to handle such flow rates."

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e)

Almost one year after this case was filed, in August 2001 Defendants installed baffles in

the ponds to increase detention time of water flowing through the ponds and began experimenting with floc testing and aeration testing in the ponds. Exh. 248, Bates 4511; Exh. 513, p. 4; Exh. 514, p. 5. 3) 1) a) 2) a) THIRD CAUSE OF ACTION-CARLTON TUNNEL TSS (30 DAY AVE.)9 "A DISCHARGE PERMIT WAS ISSUED TO DEFENDANTS" Plaintiffs incorporate herein by reference all paragraphs in element 1 for Claim 1(b). "THE PERMIT HAD EFFLUENT LIMITATIONS FOR TSS (30 DAY AVE.)" The Carlton Tunnel permit has an effluent limitation for Total Suspended Solids on a 30

day average of 30 mg/l. Stipulation 52 Amended Final Pretrial Order. Exh. 237, Bates 4394. 3) a) "THE 30 AVE. TSS LIMIT WAS EXCEEDED" CDPS Permit CO-0024562 requires the permittee CC&V to submit discharge monitoring

reports ("DMRs"). Stipulation 50 Amended Final Pretrial Order. b) According to DMRs, the 30 day average TSS effluent limitation in permit CO-0024562

for Outfall 002 was exceeded in December 1995; January 1996; and March 1996. Stipulation 53 Amended Final Pretrial Order. The Defendants have also admitted that "each of the alleged permit limit exceedences of the TSS limits contained in CDPS Permit CO-0024562 identified in paragraph 26 of the referenced final order [Exh. 73, Bates 2273] constituted a violation of that permit." Exh. 373, Bates 5669, #83; Exh. 367, Bates 5543. c) In the Amended Final Pretrial Order, Defendants did not plead the "upset defense" as an

affirmative defense to the Carlton Tunnel Outfall 002 TSS (30 day average) exceedences, or any
9

Defendants only challenge element 1 (as it related to "all defendants") and element 4 of this cause of action.

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other exceedence. As per the terms of the Carlton Tunnel permit, the upset defense is an affirmative defense for which the permittee bears the burden of proof. Exh. 237, Bates 4417. Any determination by WQCD during administrative review of an upset request is not final agency action. Exh. 237, Bates 4417. The WQCD and EPA both brought enforcement actions against defendants in 2003 for violations that Defendants claimed in 1999 were excused under the upset defense. Exh. 57; Exh. 73. d) In the 2003 Consent Agreement with some of the Defendants, the EPA determined that

TSS exceedences of the 30 day average limit in the Carlton Tunnel permit constituted a violation of the Clean Water Act. Exh. 73, Bates 2273. 4) a) "ONGOING VIOLATIONS" The Defendants did not take any action between March 1996 and November 27, 2000 to

completely remediate the cause of the TSS exceedences alleged by Plaintiffs. Testimony of Scott Lewis, 2/14/06 at 18:12-16. There are no treatability studies to determine the effectiveness of the ponds in treating pollutants. Ex. 71, Bates 2234-36. Instead of installing additional treatment systems in response to the violations, Defendants instead determined that such treatments systems were "unnecessary" because they were asserting the "upset defense" to the violations--a defense not specifically plead in the Amended Final Pretrial Order in this case. Exh. 71, Bates 2237-39. b) In addition to the TSS violations from December 1995 through March 1996 as alleged by

Plaintiffs, Defendants also had a TSS exceedence in August 1994. Exh. 278, Bates 4688. c) In letters to the WQCD, representatives of the Defendants stated that "[w]ith the expected

pattern of behavior in the tunnel discharge, we will most likely be seeing an increase in total 29

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suspended solids in the next few months. TSS has already started to increase and usually follows the peak in zinc levels by a month or two." Exh. 291, Bates 4807. Despite admitting to the yearly seasonal exceedences of TSS, flow, and zinc, the Defendants did not take any actions to completely eliminate the cause of these violations before November 27, 2000. d) In their September 25, 1996 Carlton Tunnel renewal permit application, a representative

of Defendants stated under penalty of perjury to the WQCD that "CC&V does not consider these ponds to have been installed for treatment of the water under current conditions." Exh. 289, Bates 4788. There were no changes to the Carlton Tunnel ponds between September 25, 1996 and November 27, 2000. d) At the conclusion of a site inspection of the Carlton Tunnel ponds on June 20, 2001,

WQCD inspector Gary Soldano concluded that the "efficacy of removal of solids and metals in the settling ponds is unknown." Exh. 512, p. 11. e) Almost one year after this case was filed, in August 2001 Defendants installed baffles in

the ponds to increase detention time of water flowing through the ponds and began experimenting with floc testing and aeration testing in the ponds. Exh. 248, Bates 4511; Exh. 513, p. 4; Exh. 514, p. 5. 4) 1) a) 2) FOURTH CAUSE OF ACTION-CARLTON TUNNEL TSS (7 DAY AVE.)10 "A DISCHARGE PERMIT WAS ISSUED TO DEFENDANTS" Plaintiffs incorporate herein by reference all paragraphs in element 1 for Claim 1(b). "THE PERMIT HAD EFFLUENT LIMITATIONS FOR TSS (7 DAY AVE.)"

10

Defendants only challenge element 1 (as it related to "all defendants") and element 4 of this cause of action.

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a)

The Carlton Tunnel permit has an effluent limitation for Total Suspended Solids on a 7

day average of 45 mg/l . Stipulation 54 Amended Final Pretrial Order. Exh. 237, Bates 4394. 3) a) "THE 7 AVERAGE TSS LIMIT WAS EXCEEDED" CDPS Permit CO-0024562 requires the permittee CC&V to submit discharge monitoring

reports ("DMRs"). Stipulation 50 Amended Final Pretrial Order. b) According to DMRs, the 7 day average TSS effluent limitation in permit CO-0024562 for

Outfall 002 was exceeded on May 6, 1996. Stipulation 54 Amended Final Pretrial Order. The DMRs also reveal an exceedence of the 7 day average TSS limit in March 1996. Exh. 243, Bates 4473. The 2003 EPA Consent Agreement also identifies an exceedence of the TSS 7 day average limit in March 1996. Exh. 73, Bates 2273. In the 2003 Consent Agreement with some of the Defendants, the EPA determined that TSS exceedences of the 30 day average limit in the Carlton Tunnel permit constituted a violation of the Clean Water Act. Exh. 73, Bates 2273. The Defendants have also admitted that "each of the alleged permit limit exceedences of the TSS limits contained in CDPS Permit CO-0024562 identified in paragraph 26 of the referenced final order [Exh. 73, Bates 2273] constituted a violation of that permit." Exh. 373, Bates 5669, #83; Exh. 367, Bates 5543. c) In the Final Pretrial Order, Defendants did not plead the "upset defense" as an affirmative

defense to the Carlton Tunnel Outfall 002 TSS (7 day) exceedences, or any other exceedence. As per the terms of the Carlton Tunnel permit, the upset defense is an affirmative defense for which the permittee bears the burden of proof. Exh. 237, Bates 4417. Any determination by WQCD during administrative review of an upset request is not final agency action. Exh. 237, Bates 4417. The WQCD and EPA both brought enforcement actions against Defendant in 2003 31

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for violations that Defendants claimed in 1999 were excused under the upset defense. Exh. 57; Exh. 73. 4) a) "ONGOING VIOLATIONS" The Defendants did not take any action between March 1996 and November 27, 2000 to

completely remediate the cause of the TSS exceedences alleged by Plaintiffs. Testimony of Scott Lewis, 2/14/06 at 18:12-16. not Moreover, there were two TSS violations after construction of the fifth pond (March and May 1996). There are no treatability studies to determine the effectiveness of the ponds in treating pollutants. Exh. 71, Bates 2234-36. Instead of installing additional treatment systems in response to the violations, Defendants instead determined that such treatments systems were "unnecessary" because they were asserting the "upset defense" to the violations--a defense not specifically plead in the Amended Final Pretrial Order in this case. Exh. 71, Bates 2237-39. b) In letters to the WQCD, representatives of the Defendants stated that "[w]ith the expected

pattern of behavior in the tunnel discharge, we will most likely be seeing an increase in total suspended solids in the next few months. TSS has already started to increase and usually follows the peak in zinc levels by a month or two." Exh. 291, Bates 4807. Despite admitting to the yearly seasonal exceedences of TSS, flow, and zinc, the Defendants did not take any actions to completely eliminate the cause of these violations before November 27, 2000. c) In their September 25, 1996 Carlton Tunnel renewal permit application, a representative

of Defendants stated under penalty of perjury to the WQCD that "CC&V does not consider these ponds to have been installed for treatment of the water under current conditions." Exh. 289,

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Bates 4788. There were no changes to the Carlton Tunnel ponds between September 25, 1996 and November 27, 2000. d) At the conclusion of a site inspection of the Carlton Tunnel ponds on June 20, 2001,

WQCD inspector Gary Soldano concluded that the "efficacy of removal of solids and metals in the settling ponds is unknown." Exh. 512, p. 11. e) Almost one year after this case was filed, in August 2001 Defendants installed baffles in

the ponds to increase detention time of water flowing through the ponds and began experimenting with floc testing and aeration testing in the ponds. Exh. 248, Bates 4511; Exh. 513, p. 4; Exh. 514, p. 5. 5) 1) a) 2) FIFTH CAUSE OF ACTION-CARLTON TUNNEL ZINC (30 DAY AVE.)11 "A DISCHARGE PERMIT WAS ISSUED TO DEFENDANTS" Plaintiffs incorporate herein by reference all paragraphs in element 1 for Claim 1(b). "THE PERMIT HAD EFFLUENT LIMITATIONS FOR ZINC (30 DAY

AVERAGE)" a) The Carlton Tunnel permit has an effluent limitation for zinc on a 30 day average of .54

mg/l. Stipulation 55 Amended Final Pretrial Order. Exh. 237, Bates 4394. 3) a) "THE 30 DAY AVERAGE ZINC LIMIT WAS EXCEEDED" CDPS Permit CO-0024562 requires the permittee CC&V to submit discharge monitoring

reports ("DMRs"). Stipulation 50 Amended Final Pretrial Order. b) According to DMRs, the 30 day average zinc limit in permit CO-0024562 for Outfall 002

was exceeded in August 1998 and June 1999. Stipulation 55 Amended Final Pretrial Order. In
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Defendants only challenge element 1 (as it related to "all defendants") and element 4 of this cause of action.

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the 2003 Consent Agreement with some of the Defendants, the EPA determined that 30 day average zinc exceedences of the Carlton Tunnel permit constituted a violation of the Clean Water Act. Exh. 73, Bates 2274. The Defendants have also admitted that "each of the alleged permit limit exceedences of the zinc limits contained in CDPS Permit CO-0024562 identified in paragraph 26 of the referenced final order [Exh. 73, Bates 2273] constituted a violation of that permit." Exh. 373, Bates 5669, #83; Exh. 367, Bates 5543. c) In the Amended Final Pretrial Order, Defendants did not plead the "upset defense" as an

affirmative defense to the Carlton Tunnel Outfall 002 zinc (30 day average) exceedences, or any other exceedence. As per the terms of the Carlton Tunnel permit, the upset defense is an affirmative defense for which the permittee bears the burden of proof. Exh. 237, Bates 4417. Any determination by WQCD during administrative review of an upset request is not final agency action. Exh. 237, Bates 4417. The WQCD and EPA both brought enforcement actions against the Defendants in 2003 for violations that Defendants claimed in 1999 were excused under the upset defense. Exh. 57; Exh. 73. 4) a) "ONGOING VIOLATIONS" The Defendants did not take any action between September 1995 and November 27, 2000

to completely remediate the cause of the 30 day average zinc exceedences alleged by Plaintiffs. Testimony of Scott Lewis, 2/14/06 at 3:19-24. The maintenance of the transmittal trough was not specifically designed to remediate the zinc violations at Carlton Tunnel Outfall 002. Testimony of Scott Lewis, 2/14/06 at 3:10-15. There are no treatability studies to determine the effectiveness of the trough maintenance in treating pollutants. Testimony of Scott Lewis, 2/14/06 at 4:6-8; Exh. 71, Bates 2234-36. Instead of installing additional treatment systems in response 34

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to the violations, Defendants instead determined that such treatments systems were "unnecessary" because they were asserting the "upset defense" to the violations--a defense not specifically plead in the Amended Final Pretrial Order in this case. Exh. 71, Bates 2237-39. b) In addition to the zinc violations from August 1998 and June 1999 as alleged by

Plaintiffs, Defendants also had zinc exceedences in May and June 1994. Exh. 278, Bates 468485. CC&V was also subject to an enforcement action for zinc violations at Carlton Tunnel Outfall 002 in 1992. Exh. 238. c) In letters to the WQCD, representatives of the Defendants described the zinc exceedences

as "a seasonal excursion which has occurred during the summer months in the past." Exh. 291, Bates 4799. Representatives of the Defendants have also stated to the WQCD that they "do not control the discharge" and "the flow from the tunnel is beyond our capacity to control." Exh. 291, Bates 4804 and 4807. Representatives of the Defendants have also described the zinc and flow exceedences as a "yearly pattern where we see the levels rise in the summer months. Last year's peak was in May. The zinc levels go up as the flow out of the Carlton Tunnel increases." Exh. 291, Bates 4807. Representatives of the Defendants also describe the flow exceedences as an "expected pattern of behavior in the tunnel discharge." Exh. 291, Bates 4807. In 1995, representatives of the Defendants stated that no one at the company "knows of any practical way of moderating these parameters [flow]". Exh. 421, Bates 6546. Defendants' representative Scott Lewis has previously represented to the WQCD that zinc is a naturally occurring mineral in the area and leaching of native rock is commonly associated with heavy precipitation. Testimony of Scott Lewis, 2/14/06 at 13:25-14:8-20. Despite admitting to the yearly seasonal

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exceedences of flow and zinc, the Defendants did not take any actions to completely eliminate the cause of these violations before November 27, 2000. d) In their September 25, 1996 Carlton Tunnel renewal permit application, a representative

of Defendants stated under penalty of perjury to the WQCD that "CC&V does not consider these ponds to have been installed for treatment of the water under current conditions." Exh. 289, Bates 4788. There were no changes to the Carlton Tunnel ponds between September 25, 1996 and November 27, 2000. e) At the conclusion of a site inspection of the Carlton Tunnel ponds on June 20, 2001,

WQCD inspector Gary Soldano concluded that the "efficacy of removal of solids and metals in the settling ponds is unknown." Exh. 512, p. 11. f) Almost one year after this case was filed, in August 2001 Defendants installed baffles in

the ponds to increase detention time of water flowing through the ponds and began experimenting with floc testing for zinc removal and aeration testing in the ponds. Exh. 248, Bates 4511; Exh. 513, p. 4; Exh. 514, p. 5; Exh. 515, p. 8. 6) 1) a) SIXTH CAUSE OF ACTION-CARLTON TUNNEL ZINC (DAILY MAX)12 "A DISCHARGE PERMIT WAS ISSUED TO DEFENDANTS" Plaintiffs incorporate herein by reference all paragraphs in element 1 for Claim 1(b).

2) "THE PERMIT HAD EFFLUENT LIMITATIONS FOR ZINC (DAILY MAXIMUM)" a) The Carlton Tunnel permit has an effluent limitation for zinc on a daily maximum of .60

mg/l. Stipulation 56 Amended Final Pretrial Order. Exh. 237, Bates 4394.

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3) a)

"THE DAILY MAXIMUM ZINC LIMIT WAS EXCEEDED" CDPS Permit CO-0024562 requires the permittee CC&V to submit discharge monitoring

reports ("DMRs"). Stipulation 50 Amended Final Pretrial Order. b) According to DMRs, the daily average zinc limit in permit CO-0024562 for Outfall 002

was exceeded on September 9, 1998, May 19, 1999 and June 1, 1999. Stipulation 56 Amended Final Pretrial Order. In the 2003 Consent Agreement with some of the Defendants, the EPA determined that daily average zinc exceedences of the Carlton Tunnel permit constituted a violation of the Clean Water Act. Exh. 73, Ba