Free Pretrial Order - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-01263-PSF-MEH ROBERT M. FRIEDLAND, Plaintiff, v. TIC ­THE INDUSTRIAL COMPANY; GEOSYNTEC CONSULTANTS INC. f/k/a GEOSERVICES, INC. Defendants. FINAL PRETRIAL ORDER 1. DATE AND APPEARANCES The Final Pretrial Conference in this matter was conducted on May 11, 2007. Appearing for plaintiff Robert Friedland were R. Kirk Mueller, Kristina I. Mattson and Perry L. Glantz of the law firm Fognani & Faught, PLLC. Appearing for defendant TIC ­The Industrial Company (" TIC" was Colin C. Deihl of the law firm of Faegre & Benson LLP. Appearing for defendant ) GeoSyntec Consultants, Inc. f/k/a Geoservices, Inc. (" GeoSyntec" were Terence M. Ridley and ) Marian L. Carlson of the law firm of Wheeler Trigg Kennedy LLP. 2. JURISDICTION This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 9613(b).

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3. CLAIMS AND DEFENSES Plaintiff Robert Friedland Robert Friedland contends TIC managed, controlled and/or conducted earthwork and other operations at the Summitville Mine that resulted in the release or potential release of hazardous substances, including acid rock drainage, at or from the Summitville Mine. Moreover, Robert Friedland contends TIC managed, controlled and/or conducted operations that contributed to the ultimate failure of the heap leach pad liner system by negligently and improperly placing fill beneath the concrete foundation of Well Can Number 1 and improperly constructing the concrete foundation in that location. Robert Friedland contends GeoSyntec managed, controlled and/or conducted quality assurance work for the installation and repair of the synthetic geomembrane liner in the heap leach pad at the Summitville Mine. GeoSyntec contributed to the ultimate failure of the heap leach pad that resulted in the release or potential release of hazardous substances at or from the Summitville Mine by failing to properly oversee and control the liner installation and repair process. Robert Friedland brings this action against TIC and GeoSyntec for cost recovery and contribution with respect to costs he incurred responding to releases or threatened releases of hazardous substances at or from the Summitville Mine, and for costs he incurred pursuant to a Consent Decree approved by the United Stated District Court for the District of Colorado. Robert Friedland contends TIC and GeoSyntec are liable to him in contribution as operators and/or arrangers under CERCLA. Under section 113 of CERCLA, 42 U.S.C. § 9613, Robert Friedland is entitled to contribution from both TIC and GeoSyntec for any costs, damages,

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injuries or expenses arising from or caused by the cost recovery action initiated against him by the United States of America and the State of Colorado. This includes without limitation Robert Friedland' cost of settlement incurred pursuant to the Consent Decree. s Robert Friedland denies any personal liability under CERCLA related to the Summitville Mine. Accordingly, it would be inappropriate to allocate any costs to Robert Friedland in the contribution analysis in this action. Defendant TIC ­The Industrial Company Plaintiff cannot meet its burden of showing that TIC was an " operator"or " arranger" under 42 U.S.C. § 9607(a). TIC cannot be held liable as an operator or arranger because it did not manage or control any work that led to the release or threatened release of a hazardous substance. Plaintiff and his companies, including SCMCI, controlled the Mine and delegated day-to-day construction management responsibility to Bechtel. Bechtel directed, controlled, and supervised all of TIC' work, and pursuant to TIC' contract with SCMCI, TIC was s s contractually required to follow Bechtel' direction and instruction. s In addition, TIC cannot be liable as an operator or arranger with respect to the release of cyanide from the heap leach pad (HLP) because it left the Site in April of 1986, several months before any mining operations began and several months before any cyanide solution was applied to the heap leach pad. Furthermore, TIC cannot be liable as an operator or arranger with respect to the release of acid rock drainage because the earthen materials that TIC allegedly disturbed at the Mine were naturally occurring and did not contain any introduced hazardous substances (i.e., the chemical composition of any earthen materials moved at the site was identical to that of the earthen materials located at the final resting place for the moved materials). To hold TIC liable

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for the movement of these earthen materials would lead to the absurd result that anyone who turned a shovel in the Rocky Mountain West would be a CERCLA-liable operator. Even if Plaintiff could meet its burden of showing that TIC was an operator or arranger, Plaintiff has not suffered any damages. Plaintiff already has received a windfall recovery through prior CERCLA litigation. Plaintiff has already received approximately $4,500,000 more than he paid to the government as part of the consent decree that forms the basis for his lawsuit against TIC. Since he has recovered the entire amount that he paid to the government, he has no damages and no right to contribution as a matter of law under CERCLA § 113(f). In addition, Plaintiff cannot meet his burden of showing he has paid more than his " fair share"of the response costs incurred at the Site. The evidence will show that it was Friedland who set into motion a mining project that lacked basic environmental controls and it was Friedland who had authority and control to shut down the Summitville Mining project, but failed to do so. Since Plaintiff paid less than his " share,"he has no damages and no right to fair contribution. Finally, the response costs paid by Plaintiff were for activities inconsistent with the National Contingency Plan (" NCP" Plaintiff will be unable to meet his burden of ). demonstrating that his payment to the government was consistent with the NCP. Plaintiff' claims must fail for all of the aforementioned reasons as well as for all of the s reasons set forth in TIC' Amended Answer with Affirmative Defenses. s Defendant GeoSyntec Plaintiff has the burden to prove that GeoSyntec was an " arranger"or an " operator" under CERCLA in order to be entitled to any recovery in this action. GeoSyntec denies that it 4

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either controlled or had authority to control any construction or operational activities at the Summitville site that would satisfy the legal requirements necessary to be deemed an " operator" or " arranger"under CERCLA. Indeed, GeoSyntec denies that it contributed to a failure of the HLP liner system in any respect. GeoSyntec further asserts that Plaintiff' claims are barred s under the equitable doctrines of laches and unclean hands; that Plaintiff' claims are barred by s the doctrines of res judicata and/or collateral estoppel, as he failed to bring his claims against GeoSyntec when GeoSyntec was joined in the underlying Cost Recovery Action, before GeoSyntec obtained judgment in its favor; and that Plaintiff' claims are barred by his own s illegal conduct. GeoSyntec further asserts that Plaintiff cannot recover contribution in this case because he has already recovered more than the $20.7 million paid to resolve the Cost Recovery Action from other parties involved with the Summitville site. Plaintiff has recovered over $25 million from other parties, and has lawsuits and claims pending through which he seeks at least another $20 million from various insurance companies, for the same cleanup costs. GeoSyntec denies that Plaintiff incurred any defense costs, as those costs were paid by a separate legal entity, Ivanhoe Capital Corp. Therefore, under no circumstances should Plaintiff be allowed to offset defense costs from the amounts he has recovered, and which eliminate any damages allegedly incurred by Plaintiff. GeoSyntec further asserts that Plaintiff has the burden to prove that he paid more than his fair share under CERCLA in order to recover any sum whatsoever in this CERCLA contribution action. GeoSyntec denies that Plaintiff has paid more than his fair share and therefore asserts, on this ground also, that Plaintiff has no recoverable damages in this CERCLA contribution action.

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Given his control over the site, Plaintiff should have paid substantially more than $20.7 million in cleanup costs. GeoSyntec further asserts that even absent these several barriers to Plaintiff' s contribution rights, even if GeoSyntec were somehow held to have the CERCLA status of an " operator"or " arranger,"the Court would then have to consider all relevant equitable factors to determine what, if any, contribution should be awarded against GeoSyntec. It is submitted that all equitable factors dictate that GeoSyntec be allocated little or no responsibility for the cleanup costs, because even if Plaintiff' allegations were true, its role at the site was minimal compared s to the roles of other parties such as Friedland, SCMCI, Bechtel Corporation, and Industrial Constructors Corp. Among other things, there is no causal relationship between the activities of GeoSyntec, i.e., providing quality assurance services with respect to the geomembrane liner, and any cleanup costs incurred with respect to the Summitville site. Leakage through the liner did not cause the EPA or State of Colorado to incur any cleanup costs. Rather, the cleanup costs expended with regard to the heap leach pad were for detoxification and reclamation of the pad (which Friedland' company had essentially turned into a " s pond" which costs would have been ), incurred in any event upon the termination of leaching activities by SCMCI. GeoSyntec also submits, with respect to damages, that all relevant equitable factors require the assignment of " orphan"shares in this case to Plaintiff, who had control over, among other things, what entities and contractors were engaged to provide services at the Summitville Mine. GeoSyntec was at the bottom of the contractual chain. Companies above it, such as Klohn Leonoff, ICC, and others, who had extensive roles at the project, are claimed by Plaintiff to be " orphans"whose shares should be assigned to GeoSyntec. Equity simply demands that

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these shares be assigned to the party who controlled and determined their selection and their actions, rather than on a party who had no control whatsoever over them. 4. STIPULATIONS 1. The Summitville Mine site (hereinafter the " Site" is located about 25 )

miles south of Del Norte, Colorado, in Rio Grande County. It is located within the San Juan Mountain Range of the Rocky Mountains, approximately two miles east of the Continental Divide. 2. 3. Mining activity began at the Site as early as 1870. From that time through the early 1970' the Site was the subject of s,

sporadic underground mining activities. Mining was performed in several adits, or shafts, including the Reynolds Adit, the Chandler Adit and the Iowa Adit. 4. Robert Friedland was a founder of Galactic Resources, Ltd. (hereinafter

" GRL" in 1979. ) 5. Robert Friedland was a director of GRL from March 23, 1981 through

November 2, 1990. 6. Robert Friedland was President of GRL from June 12, 1981 through June

15, 1984 and then again from June 18, 1987 through February 21, 1990. 7. Robert Friedland was Chairman of the Board and Chief Executive Officer

of GRL from June 15, 1984 through June 8, 1990, and was Vice Chairman of the Board from June 8, 1990 through November 2, 1990. 8. Galactic Resources Inc. (hereinafter " GRI" was incorporated as a wholly )

owned subsidiary of GRL.

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9.

Robert Friedland was a director and President of GRI from June 3, 1986

through January 12, 1987. 10. A company named Summitville Consolidated Mining Company

(hereinafter " SCMCI" was originally incorporated as a wholly owned subsidiary of GRI. ) 11. Robert Friedland was a director and President of SCMCI from April 26,

1984 through January 12, 1987. 12. TIC ­The Industrial Company (hereinafter " TIC" is a Delaware )

corporation, authorized to do business in Colorado, with its principal place of business in Steamboat Springs, Colorado. 13. 14. TIC was founded in 1974 in Steamboat Springs, Colorado. TIC formally ended its involvement at the Site with the execution of a

Final Release and Lien Waiver on April 9, 1986. 15. GeoSyntec Consultants, Inc., f/k/a GeoServices, Inc. was formed in 1983

as an engineering consulting firm and had expertise regarding geomembrane liners. 16. GeoSyntec entered into an agreement with Klohn-Leonhoff dated

September 23, 1985 to provide quality assurance work for the synthetic liner at the Summitville heap leach project. 17. GeoSyntec subsequently entered into a similar agreement with SCMCI

dated June 1, 1987 for similar services. 18. On December 15, 1994 EPA issued Interim Records of Decision for the

heap leach pad, the Cropsy Waste pile, Beaver Mud dump the Summitville Dam Impoundment, the mine pits, water treatment and site reclamation.

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19.

On or about May 25, 1996 the United States of America and the State of

Colorado filed suit against Robert Friedland pursuant to sections 107 and 113(g) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ultimately styled United States of America and State of Colorado v. Robert M. Friedland, et al., Civil Action No. 1213 (D. Colo. filed May 23, 1996). 20. 21. This action arises under Section 113 of CERCLA, 42 U.S.C. § 9613. On June 13, 2001 the United States District Court of the District of

Colorado approved a Settlement Agreement and Consent Decree resolving all claims against Robert Friedland. 22. Each party to this action is a " person,"as defined by Section 101(21) of

CERCLA, 42 U.S.C.§ 9601(21). 5. PENDING MOTIONS Plaintiff' Motions s 1. " Robert M. Friedland' Motion to Supplement the Record Regarding TIC ­The s

Industrial Company' Motion for Summary Judgment,"October 27, 2006 [#149]; Defendants' s Joint Opposition, November 29, 2006 [#177 ]; Plaintiff' Combined Reply Brief in Support of s Motions to Supplement Record and Motions for Summary Judgment, December 14, 2006 [#188]. 2. " Robert M. Friedland' Motion to Supplement the Record Regarding GeoSyntec s

Consultants Inc' Motion for Summary Judgment,"October 27, 2006 [#148]; Defendants' s Joint Opposition, November 29, 2006 [#177]; Plaintiff' Combined Reply Brief in Support of Motions s to Supplement Record and Motions for Summary Judgment, December 14, 2006 [#188].

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3.

" Plaintiff Robert Friedland' Motion for Summary Judgment Regarding s

Plaintiff' CERCLA Liability,"October 30, 2006 [#150]; Defendants' s Memorandum of Law in Opposition, November 29, 2006 [#178]; Plaintiff' Reply in Support of Motion, January 2, 2007 s [#195]. 4. " Robert M. Friedland' Motion for Partial Summary Judgment that Mr. s

Friedland' CERCLA Response Costs for Government Directed Remediation Were Consistent s With the National Contingency Plan,"October 30, 2006 [#152]; Defendants' Joint Response in Opposition, November 29, 2006 [#179]; Plaintiff' Reply in Support of Motion, December 18, s 2006 [#192]. Defendant TIC- The Industrial Company' Motions s 1. Defendant TIC ­The Industrial Company' Motion for s

Summary Judgment [#62] 02/08/06; Response filed 03/31/06 [#97]; Reply filed 05/03/06 [#114]. 2. Defendant TIC ­The Industrial Company' Motion to s

Remove Confidential Designation from Travelers and USF&G Settlement Agreements [#200] 01/03/07. Defendant GeoSyntec' Motions s 1. Defendant GeoSyntec' Motion for Summary Judgment [#41], filed 11/18/05; s

Motion to Supplement Defendant GeoSyntec' Motion for Summary Judgment [#44], filed s 12/22/05; Plaintiff' Response in Opposition to Defendant GeoSyntec' Motion for Summary s s Judgment [#50], filed 1/10/06; GeoSyntec' Unopposed Motion for Extension of Time to File s Reply In Support of Motion for Summary Judgment [#51], filed 1/18/06; Defendant 10

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GeoSyntec' Reply to Plaintiff' Response in Opposition to Motion for Summary Judgment s s [#75], filed 2/22/06.

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2.

GeoSyntec' Motion to Strike Certain Exhibits to Plaintiff' Response in s s

Opposition to Motion for Summary Judgment [#76], filed 2/22/06; Plaintiff' Response to s GeoSyntec' Motion to Strike Certain Exhibits to Plaintiff' Response to Motion for Summary s s Judgment [#92], filed 3/24/06; Defendant GeoSyntec' Reply to Plaintiff' Response to Motion s s to Strike Exhibits [#101], filed 4/10/06. Defendants'Joint Motions 1. Defendants' Joint Motion for Summary Judgment on Damages [#153], filed

10/30/06; Defendants' Joint Motion to File Brief in Support of Motion for Summary Judgment Under Seal [#154], filed 10/30/06; Defendants' Brief in Support of Joint Motion for Summary Judgment on Damages (Filed Under Seal) [#155], filed 10/30/06; Plaintiff' Brief in Opposition s to Defendants' Joint Motion for Summary Judgment on Damages (Filed Under Seal) [#185], filed 12/8/06; Defendants' Reply in Support of Motion for Summary Judgment on Damages (Filed Under Seal) [#202], filed 1/5/07. 6. WITNESSES a. List the nonexpert witnesses to be called by each party. List separately: (1) (2) witnesses who will be present at trial (see Fed. R. Civ. P. 26(a)(3)(A)); witnesses who may be present at trial if the need arises (see Fed. R. Civ. P. 26(a)(3)(A)); and (3) witnesses where testimony is expected to be presented by means of a deposition. See Fed. R. Civ. P. 26(a)(3)(B). d. (1) List the expert witnesses to be called by each party. List separately:

witnesses who will be present at trial (see Fed. R. Civ. P. 26(a)(3)(A)); 12

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(2) (3)

witnesses who may be present at trial (see Fed. R. Civ. P. 26(a)(3)(A)); and witnesses where testimony is expected to be presented by means of a deposition. See

Fed. R. Civ. P. 26(a)(3)(B). Witness lists for each party are attached. 7. EXHIBITS (1) (2) One combined Exhibit List is attached. Other parties: Not applicable Final exhibit lists and copies of listed exhibits must be provided to opposing counsel no later than 30 days after the final pretrial conference. The objections contemplated by Fed. R. Civ. P. 26(a)(3) shall be filed with the clerk and served by hand delivery or facsimile no later than 20 days after the exhibits are provided. Demonstrative Exhibits shall be disclosed and exchanged by the parties 10 days prior to trial. 8. DISCOVERY Discovery has been completed. 9. SPECIAL ISSUES The parties agree that any party shall be entitled to conduct preservation depositions after May 11th as necessary to authenticate trial exhibits or otherwise establish the admissibility of those exhibits. 10.SETTLEMENT The parties have conferred regarding the scheduling of a settlement conference in this case. At this time, a settlement conference has not been set. 11. OFFER OF JUDGMENT

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Counsel acknowledge familiarity with the provision of rule 68 (Offer of Judgment) of the Federal Rules of Civil Procedure. Counsel have discussed it with the clients against whom claims are made in this case. 12. EFFECT OF FINAL PRETRIAL ORDER Hereafter, this Final Pretrial Order will control the subsequent course of this action and the trial, and may not be amended except by consent of the parties and approval by the court or by order of the court to prevent manifest injustice. The pleadings will be deemed merged herein. This Final Pretrial Order supersedes the Scheduling Order. In the event of ambiguity in any provision of this Final Pretrial Order, reference may be made to the record of the pretrial conference to the extent reported by stenographic notes and to the pleadings. 13. TRIAL AND ESTIMATED TRIAL TIME; FURTHER TRIAL PREPARATION PROCEEDINGS 1. 2. 3 This matter is a trial to the court. The estimated trial time is 20 court days. The situs of trial is the United States District Court for the District of Colorado.

DATED this 11th day of May, 2007. BY THE COURT:

S/Michael E. Hegarty Michael E. Hegarty United States Magistrate Judge

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APPROVED: s/ R. Kirk Mueller R. Kirk Mueller, Esq. Perry L. Glantz, Esq. Kristina I. Mattson, Esq. Fognani & Faught, PLLC 1700 Lincoln Street, Suite 2222 Denver, CO 80203 Telephone No.: 303-382-6200 Attorneys for Plaintiff Robert M. Friedland s/ Colin Deihl, Esq. Colin Deihl, Esq. Eric Triplett, Esq. Faegre & Benson, LLP 1700 Lincoln Street, Suite 3200 Denver, CO 80202-4532 Telephone No.: 303-607-3500 Attorneys for Defendant TIC ­The Industrial Company

s/ Terence M. Ridley Terence M. Ridley, Esq. Marian L. Carlson, Esq. Wheeler Trigg Kennedy LLP 1801 California Street, Suite 3600 Denver, CO 80202-2617 Telephone No.: 303-244-1800 Attorneys for Defendant GeoSyntec Consultants, Inc.

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