Free Reply to Response to Motion - 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-1263-PSF-MEH ROBERT M. FRIEDLAND, Plaintiff, v. TIC--THE INDUSTRIAL COMPANY and GEOSYNTEC CONSULTANTS, INC. f/k/a GEOSERVICES, INC Defendants. ______________________________________________________________________________ DEFENDANT TIC ­ THE INDUSTRIAL COMPANY'S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT ______________________________________________________________________________

Between 1996 and 2005, the EPA, the State of Colorado, Robert Friedland, and over a dozen third-party defendants (including Bechtel) litigated CERCLA liability for the contamination of the Summitville Mine site in this Court in case nos. 96-N-1213 ("Summitville Mine litigation") and 01-N-1 ("Bechtel litigation"). As plaintiff notes in his opposing memorandum, the CERCLA claims in those cases totaled over $200 million. After years of formal and informal discovery, motion practice, and settlement negotiations, the parties eventually resolved the case in its entirety. At no time during that litigation did anyone claim that TIC ­ The Industrial Company had any responsibility for the contamination of the Summitville Mine site. No one joined TIC as a party to the case. No one deposed any of TIC's officers, directors, or employees. No one requested TIC's documents. No one expressed any interest in TIC's work at the site. Not EPA,

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not the State of Colorado, not Friedland. Not even Bechtel, the company in the best position to know what TIC actually did and did not do at the site. For the decade of the Summitville Mine and Bechtel litigation, TIC simply was not a factor. Now, according to plaintiff, he has miraculously discovered what no one apparently knew before: that subcontractor TIC actually controlled the Summitville Mine site construction, earthwork, design, and engineering and had the authority to make final binding decisions on how the site's owner and its general contractor constructed and designed the facility and how they disposed of hazardous substances. Not only that, TIC somehow managed to keep its overarching control of decisions at the Summitville Mine secret, not only from the government, but from the site's owners, from the general contractor, and from all the other parties who were present at the site with TIC during the mine's construction and operation. This is of course nonsense. No one joined TIC in the original action because everyone knew TIC was simply a subcontractor performing tasks at the direction of Bechtel, the general contractor. Everyone knew that TIC had no role in any of the decisions concerning the handling or disposal of hazardous substances. Even plaintiff himself repeatedly stated in the previous litigation that Bechtel operated and controlled such decisions at the site. The suggestion in plaintiff's response here that TIC actually had control and direction over the hazardous materials at the site is simply fiction. Solely to create the false impression of an issue of fact, plaintiff's response misinterprets the law and distorts, mischaracterizes, and outright misstates the same evidence that plaintiff has had for nearly a decade. Both the law and the facts compel the conclusion that TIC had no role either in operating the site or in arranging for the disposal of hazardous materials at the site. TIC is therefore entitled to summary judgment.

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RESPONSE TO PLAINTIFFS' FACTS In an effort to generate a genuine issue of material fact and stave off summary judgment, plaintiff's response makes a number of assertions of fact and cites a number of exhibits. Many of these statements are simply immaterial and have nothing to do with the key issue of who had control over the disposal of hazardous materials at the site.1 With respect to the small fraction of plaintiff's "facts" that do relate to control of the site, plaintiff either mischaracterizes the evidence cited, takes it entirely out of context, or simply misstates the facts. Moreover, other passages in the very documents plaintiff cites--passages often excised from plaintiff's submissions--actually reinforce the conclusion that Bechtel, not TIC, had control. 1. The Joint Venture Proposal. Plaintiff relies heavily on a joint venture proposal

submitted to SCMCI by TIC and others and asserts that SCMCI "accepted the joint venture proposal." See PSADF 1, 2, 3. The Project Responsibility Matrix that plaintiff cites, however, does not in any way suggest that SCMCI ever accepted this joint venture proposal; the document merely sets forth the items that TIC was to construct at the Mine. Ex. A-26, Hotaling Aff. at ¶ 7. In fact, SCMCI rejected the proposal and the associated draft joint venture contract, and instead executed an individual July 1985 contract with TIC that expressly required TIC to "follow[] the directions of BECHTEL regarding the implementation of this project." The actual SCMCI-TIC

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For example, the fact that TIC at one time had over 200 employees at the site, Plaintiffs' Statement of Additional Disputed Facts ("PSADF") 5, including "project superintendents," "managers," and "foremen," PSADF 5, has nothing to do with the exercise of control over alleged hazardous substances at the site. One person might control a site for purposes of CERCLA, and 10,000 might have no say whatever, regardless of their titles. Other facts plaintiff cites likewise have no bearing on the issue of control, including the nominal designation of TIC as an "independent contractor," PSADF 10, and the amount TIC was paid for its work, PSADF 19.

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contract did not contain the phrase "general site responsibility" that plaintiff emphasizes in his memorandum. See Ex. A-6, TIC Construction Contract at 1.2 2. The Earthwork at the Site. Citing a few project documents and the report of his

expert Dr. Andy Davis, plaintiff asserts that TIC was responsible for a "substantial portion" of the earthmoving work on the site by the end of January 1986. PSADF 7, 8, 9. This is simply wrong. As everyone acquainted with the work on the site knows, Industrial Constructors Corporation ("ICC") was the major earthwork contractor at the Mine. Donald Hotaling, Bechtel's Construction Manager and the senior Bechtel employee at the Mine, states unequivocally that ICC, not TIC, was the primary earthwork contractor at the Mine. Ex. A-26, Hotaling Aff. at ¶ 12. TIC was the mechanical subcontractor;3 nothing in its scope of work required it to do the major excavation at the site, much less install the sediment control structures on which plaintiff bases much of his claim. See, e.g., Ex. A-26, Hotaling Aff. at ¶¶ 5, 11, 16. The shorthand term "Industrial" in the January 1986 Operations Report, on which both plaintiff's memo and his expert rely, refers to ICC, and not to TIC. Exs. A-30, CRA Report at 21-22; A-31, January Operations Rpt. Other project documents use the same shorthand terminology. For example, the owner SCMCI's December 1985 Summitville Operations Report demonstrates that ICC is referred to as "Industrial" in reports of the type cited by Dr. Davis. Ex. A-32, December Operations Rpt. at RMFried 65405. To the extent that Dr. Davis purports to
In addition, Section GC-1 of the TIC/SCMCI contract states that the contract "embodies the entire agreement between [SCMCI] and [TIC] and supersedes all other agreements or understandings, both written and oral. The parties shall not be bound by, or be liable for any statement, representation, promise, inducement or understanding not set forth herein." Id. at RMFried 3607. Other documents submitted by plaintiff also demonstrate SCMCI's rejection of the joint venture proposal. E.g., Exs. A-27, Bechtel Calculation Sheet at RMFried 772 ( "Project management by TIC is deleted"); A-28, Summitville Chronology at BEC 9266 ("we would not use Contractors in Association [joint venture] but would employ TIC, CEI and M&M as Bechtel contractors"). 3 The December 30, 1985 letter from Bechtel to SCMCI makes clear that Bechtel had the same responsibility for TIC's work as if TIC had been Bechtel's direct subcontractor. See Ex. A-29, Bechtel Letter.
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opine that "Industrial" refers to TIC, his opinion does not create a genuine issue of material fact for several reasons: a. This is not a fit subject for expert testimony; the Court can read the word

"Industrial" as well as Dr. Davis. b. Even if expert opinion were appropriate, nothing in Dr. Davis's resume

suggests any particular expertise in interpreting individual nicknames for contractors in construction documents. c. Reliance on expert testimony concerning what a particular piece of verbal

shorthand must have meant offers no practical assistance to the factfinder where both percipient witnesses and contemporaneous documents show what the term actually meant. 3. Plaintiff Exhibits Supporting Summary Judgment. Many of the documents

plaintiff has submitted only strengthen the conclusion that TIC performed all of its work under the close supervision of Bechtel and lacked any responsibility either for the operation of the site as a whole or, more importantly here, for decisions concerning handling or disposal of hazardous materials. For example: a. The "forecast summary" section of plaintiff's Ex. 25 (omitted from the

version plaintiff submitted to the Court) lists TIC under "construction" but lists only Bechtel, CEI, and MME under "construction management." Ex. A-33, Presentation of Forecast at RMFried 867. b. Plaintiff asserts that TIC performed "85% of the construction activities at

the Mine," PSADF 5, but cites to no record support for this assertion. TIC can only

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assume that plaintiff failed to submit the document that includes the 85% figure 4 because it provides further evidence that Bechtel controlled TIC's activities. The report notes that Bechtel personnel "frequently are redirecting TIC causing inefficiency" and that TIC complains of "rework because of incorrect first Bechtel instructions"). Ex. A-34, WEL Memorandum. c. All of the "Daily Timesheets" plaintiff provides were submitted by

Bechtel and approved by SCMCI. See e.g., Pl. Ex. 15 at RMFried 812. Moreover, the timesheets were generated under Bechtel "Field Memoranda of Change" ("FMOCs") that list a Bechtel "Field Supervisor" and a Bechtel "Field Engineer" for the project and were signed by Donald Hotaling, Bechtel's construction manager. See e.g., Pl. Ex. 15 at RMFried 809. Consistent with this, Hotaling testifies: (a) that Bechtel had total responsibility for all of TIC's work; (b) that TIC was always told where to work and what to do; and (c) TIC was ordered to assist Bechtel in performing some of the FMOCs and Bechtel's field engineers were responsible for monitoring TIC's work on the FMOCs. Ex. A-26, Hotaling Aff. at ¶¶ 6, 9, 17. All of this demonstrates that Bechtel and SCMCI, not TIC, controlled the work at the site. d. The concrete placement logs in plaintiff's Ex. 22 (PSADF 11) show

Bechtel's control over concrete placement activities. The placement records bear Bechtel logos, contain a signature block for a Bechtel "Area Supt," and often identify the precise

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Plaintiff also misreads the document. The 85% figure refers to the percentage of employees working under Bechtel's supervision that were employed by TIC, not the percentage of total employees at the site who worked for TIC. Exs. A-26, Hotaling Aff. at ¶ 5; A-30, CRA Report at 28. At the end of December 1985, 631 people worked at the Mine, 235 of whom were employed by ICC, the major earthwork contractor. Exs. A-35, SCMCI Interoffice Memorandum at RMFried 65376; A-36, ICC Letter.

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design drawings used by TIC to prepare the concrete foundations. The logs are entirely consistent with Bechtel's "total and joint and several responsibility" for TIC's work. Exs. A-4, Contract between SCMCI and Bechtel at 3; A-26, Hotaling Aff. at ¶ 13 (TIC's signatures on Bechtel concrete placement records do not signify final approval of concrete work; only Bechtel could issue final approval for any of TIC's work). e. The concrete placement record for the Well Can No. 1 foundation also

demonstrates TIC's lack of control. Bechtel, not TIC, approved the record, which states that Klohn Leonoff and SCMCI selected and approved the location and foundation for the well can. Exs. A-26, Hotaling Aff. at ¶ 13; A-37, Bechtel Concrete Placement Record. The Klohn Leonoff Inspection Report (the sole basis for plaintiff's argument concerning the formwork) also notes that "Bechtel's inspector should not allow any fill under the concrete" (emphasis added). 5 Pl. Ex. 23. f. SCMCI reminds Bechtel in Pl. Ex. 26 that it is contractually obligated to

"bear total responsibility" for TIC's work at the Mine. g. scope. Plaintiff's Ex. 27 shows Bechtel's authority to remove work from TIC's

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Plaintiff's allegation that TIC is responsible for the failure of the HLP liner system, although not bearing directly on the present motion, provides a perfect example of plaintiff's strained attempts to fabricate factual support for his claim. Plaintiff bases the assertion on a sequence of speculations centered on a single document, a handwritten Klohn Leonoff Inspection Report (Pl. Ex. 23) that merely notes the presence of fill "within the formwork." To prevail in his argument, however, plaintiff would need to prove much more, specifically that: (1) TIC poured the concrete foundation for Well Can No. 1 with fill "within the formwork;" (2) this fill resulted in structural failure of the well can foundation; (3) such a structural failure resulted in a tearing of the geomembrane liner and breach of the compacted clay liner; and (4) this hypothetical tearing and breach resulted in the release of cyanide leachate through the HLP liner system. Plaintiff has not provided any evidence to support any of these necessary elements, and in fact TIC's expert is prepared to testify these events did not occur.

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4.

The Dog in the Night-Time.

"Is there any other point to which you would wish to draw my attention?" "To the curious incident of the dog in the night-time." "The dog did nothing in the night-time." "That was the curious incident," said Sherlock Holmes.6 Plaintiff's Statement of Additional Disputed Facts is perhaps most notable for what it does not say. Despite all the documents in his possession and a year of discovery,7 plaintiff offers no "additional facts" and cites no evidence suggesting that TIC actually: · · · · designed or approved the design of the mining facility, or determined what earth should be moved or where it should be moved to, or established or approved the operating procedures for the mine, or decided how hazardous waste at the site would be handled.

Given the way plaintiff characterizes the control TIC supposedly exercised at the site, one would expect plaintiff to be able to come up with at least one piece of evidence showing that TIC actually acted consistent with its claimed dominant policy-making role on the site. He has not because he cannot. TIC had no such control. TIC was a subcontractor, "responsible for following the directions of BECHTEL regarding the implementation of this project." Ex. A-6, TIC Construction Contract at 1.

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A.C. Doyle, "Silver Blaze," The Memoirs of Sherlock Holmes. Plaintiff's comments about the state of discovery in this case, Pl. memo at 13 n.1, are, to be generous, incomplete. TIC produced all the documents it had concerning the site (some 282 pages) in February 2005. Since that time, plaintiff has done virtually nothing to pursue discovery against TIC, and has not deposed any TIC personnel. The Court should also reject plaintiff's suggestion that the Court should delay decision on this motion to permit discovery under Rule 56(f). Id. Rule 56(f) requires a party to specify exactly (1) what discovery it proposes to conduct, (2) why it could not have conducted it before, (3) what evidence it expects to obtain through that discovery, and (4) how that evidence would change the result of the motion. See, e.g., Reid v. New Hampshire, 56 F.3d 332, 341-42 (1st Cir. 1995). Plaintiff's response does not meet any of these requirements.

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Finally, some comment is necessary about plaintiff's radical change in position. In the Summitville Mine litigation, plaintiff asserted unequivocally that Bechtel controlled the mine site. For example, plaintiff claimed that Bechtel "had significant design and operational control over the entire site," that "Bechtel was actively and inextricably involved in making, directing, and implementing critical project management and oversight decisions," Ex. A-38, Friedland's Corr. Resp. to Bechtel's Mot. for Summ. J. at 25, 27, and that Bechtel "controlled operations of the Mine through various subcontractors who were engaged to perform services at the Mine by and under the direction of Bechtel," Ex. A-39, Friedland's Opp. to Bechtel's Mot. to Dismiss Comp. at 5. In the present case, of course, plaintiff asserts just as unequivocally that TIC--one of those Bechtel "subcontractors"--actually controlled the site. Plaintiff tries to rationalize this contradiction by claiming that he has only recently learned TIC's true role at the site from discovery taken in this case. Pl. memo - Response to Statement of Undisputed Facts ¶¶ 8, 17, 29. Notwithstanding this assertion, however, every single piece of evidence that plaintiff has submitted to the Court in supposed support of these "newly discovered facts" was produced in the prior litigation, in which plaintiff claimed Bechtel controlled the site.8 See Pl. Ex. 9. Plaintiff's response does not cite or rely on any new evidence produced by TIC in this case.9 Plainly, plaintiff's 180-degree change is position was prompted not by discovery but by expediency.

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Dr. Davis's report was of course developed in the present litigation, but it likewise relies solely on information that has been available to plaintiff for years. 9 See Ex. A-40, Triplett Aff.

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ARGUMENT Plaintiff's claims against TIC may be conveniently divided into four categories: plaintiff claims that TIC is both an operator and an arranger with respect to both the cyanide contamination and the claimed ARD contamination. Plaintiff's response fails to raise a geniune issue of material fact as to any of these four claims. TIC will address each claim in turn. I. TIC is Not an "Operator" under CERCLA Plaintiff seeks to hold TIC liable as a "person who at the time of disposal of any hazardous substance...operated any facility at which such hazardous substances were disposed of." 42 U.S.C. § 9607(a)(2). To be liable as an operator under this section, a party must at the time of disposal, "manage, direct, or conduct operations specifically related to pollution, that is, operations having to do with the leakage or disposal of hazardous waste, or decisions about compliance with environmental regulations." United States v. Bestfoods, 524 U.S. 51, 66-67 (1998); 42 U.S.C. § 9607(a)(2). The focus of this inquiry is the degree of control exercised by the alleged operator. As the Supreme Court explained: In our enquiry into the meaning Congress presumably had in mind when it used the verb "to operate," we recognized that the statute obviously meant something more than mere mechanical activation of pumps and valves, and must be read to contemplate "operation" as including the exercise of direction over the facility's activities. Id. at 71 (emphasis added). This Court has likewise noted in post-Bestfoods litigation involving Friedland that the "dominant explication," adopted by eight different federal circuit courts, sees an operator as "someone actively involved in running the facility, typically on a day-to-day, managerial basis." United States v. Friedland, 173 F. Supp. 2d 1077, 1094-95 n.4 (D. Colo. 2001) (emphasis added); Ex. A-42, Order and Memorandum of Decision.

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Although plaintiff's brief pays lip service to the same cases TIC cites (e.g., Bestfoods), his argument distorts their holdings significantly. Plaintiff asserts that "the analysis must focus on whether TIC's conduct at the Mine resulted in the release of hazardous substances." Pl. memo. at 2. Stated variously, this assertion is the major theme of plaintiff's "operator" argument: · "a party is liable as an `operator' under CERCLA if it directly participates in activities that lead to the release of hazardous substances" · · · · "the work that resulted in the release" "activities that led to the release" "activities contributed to the response costs" "it is actual involvement in conduct that resulted in the release of hazardous substances that matters" Pl. memo at 19-20. None of these is the standard for operator liability under CERCLA. If they were, a janitor who kicks over a bucket or the manufacturer of a plastic trash bag that tears would be an "operator;" after all, under plaintiff's analysis, each has engaged in activities that led to the release of a hazardous substance. The test for operator liability is not a "but-for" causation test as plaintiff would have it, but a test of whether a party, in the words of Bestfoods, "manage[d], direct[ed], or conduct[ed] operations specifically related to the leakage or disposal of hazardous waste." 524 U.S. at 66-67. Under that correct standard, TIC lacked even the slightest degree of the requisite control, and therefore is not an "operator" under § 9607(a).

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A.

TIC is not an "Operator" with respect to cyanide contamination.

The undisputed evidence establishes that TIC was not an "operator" with respect to the cyanide contamination at the site. 1. TIC was not even on the site "at the time of disposal."

As a threshold matter, TIC cannot be held liable as an operator with respect to the releases of cyanide solution from the Heap Leach Pad ("HLP") because its activities at the site ended on April 9, 1986, nearly two months before cyanide leaching began on June 5, 1986, and therefore before any cyanide could possibly have been released. Exs. A-13; A-14, at 17. An entity can only be liable as an "operator" under CERCLA if it controlled an operation specifically related to pollution at the time of disposal. Bestfoods, 524 U.S. at 66-67; 42 U.S.C. § 9607(a)(2). Here, inasmuch as TIC left the site for good two months before the cyanide release could possibly have begun, TIC cannot be an "operator" with respect to any releases or threatened releases of cyanide or other hazardous substances from the HLP. In his sole response on this issue, plaintiff admits that TIC was done and gone before cyanide leaching began, but "asserts that the HLP was already damaged and doomed to failure by the time of such `completed' work." Pl. memo at 8-9. Plaintiff cites no factual support for this assertion and no legal authority suggesting that, even if it were true, such facts would bring TIC within the scope of operator liability. Absent either a factual or a legal basis for an objection, plaintiff's mere assertion is not sufficient to defeat summary judgment on this issue. 2. TIC did not "direct the workings of, manage, or conduct the affairs of" the site.

Even assuming for the sake of argument that TIC had not left the site before cyanide leaching began, TIC's role at the site while it was there exhibited none of the "control" necessary 12

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for operator liability. TIC's role is set out in detail in its original brief; in a nutshell, TIC had no involvement in running the facility, and in fact was not even in charge of its own affairs. TIC's contract with SCMCI explicitly stated that "[TIC] is responsible for following the directions of BECHTEL regarding the implementation of this project." Ex. A-6, at 1. TIC was even further removed from any management or direction of the facility's handling of cyanide. Setting aside the fact that TIC had left before the leaching began, TIC had no role in designing, engineering, or approving the leaching process or the HLP. Plaintiff's response on the factual side of this argument is twofold. First, plaintiff tries to pile up examples of TIC's activity at the site. None of this evidence is remarkable. TIC was, after all, the construction subcontractor; it performed work within the scope of its contract, employed personnel of various classifications at the site, and submitted reports on its work to Bechtel and SCMCI, who had overall responsibility for the project. None of this evidence, however, goes to the key issue of control. The mere volume of a party's activity at a site, without any evidence that a party actually directed the workings of, managed, or conducted the affairs of the site, simply is not enough to impose operator liability under CERCLA. Plaintiff cites no authority that holds otherwise. Second, plaintiff tries to manufacture the illusion of TIC control over the site by mischaracterizing project documents, taking them out of context, and drawing unreasonable inferences from them. Most of these documents are forms and reports concerning TIC's work at the site, apparently offered in the hope that the Court will assume that paperwork equals management. The only reasonable inference that may be drawn from these documents, however, is that Bechtel and SCMCI oversaw, evaluated, and controlled virtually every aspect of TIC's

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work on the project, requiring reports on their own forms for their own purposes. The Court should not and does not need to guess at the role of TIC at the site based on such documents. The affidavit of Bechtel's highest ranking employee at the site, Donald Hotaling, submitted with this memorandum, addresses virtually every one of plaintiff's speculative assertions about the respective duties, responsibilities, and authority of TIC, SCMCI, and Bechtel at the site, and TIC urges the Court to review the affidavit in its entirety. Plaintiff's submissions do not create a genuine issue of material fact on this issue. On the legal side, plaintiff repeatedly argues that the authorities TIC cites do not set down absolute rules without exceptions, but then fails to suggest why the specific facts here should fall within such an exception. For example, plaintiff tries to address Edward Hines Lumber Co. v. Vulcan Materials Co., 861 F.2d 155, vacated in part on other grounds (7th Cir. 1988), by citing other cases noting that Hines does not hold that "a contractor can never be liable as an operator." Pl. memo. at 22. Plaintiff never takes the next step, however, to show any reason why subcontractor TIC had more control over the site here than did the contractor in Hines, who designed and built the facility, provided the hazardous substance, and reserved the right to postconstruction inspections of operations. Hines, 861 F.2d at 157. The case law is clear: a subcontractor like TIC, working under the direct and close supervision of at least two higher layers of management and having no voice in day-to-day decisions and operations, lacks any hint of the "control" necessary to impose "operator" liability. See, e.g., Interstate Power Co. v. Kansas City Power & Light Co., 909 F. Supp. 1284, 1288-89 (N.D. Iowa 1994). TIC is entitled to judgment as a matter of law.

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B.

TIC is not an "Operator" with respect to ARD contamination.

The undisputed evidence also establishes that TIC was not an "operator" with respect to the ARD contamination at the site. 1. TIC was not the earthwork contractor at the site.

Plaintiff's argument that TIC was an "operator" with respect to the ARD contamination at the site rests squarely on an erroneous assumption: that TIC had control over extensive earthwork at the site. As discussed in detail at page 4 above, however, ICC, not TIC, performed the major earthwork at the site. Indeed, at the end of December 1985, ICC employed 235 people at the site. Ex. A-36, ICC Letter at RMFried 65501. Even if TIC performed some incidental digging as part of the construction work it did under Bechtel's direction, that digging pales in comparison to the many tons of earth moved by the major earthwork contractor ICC. See, e.g., Ex. A-41, Groven Depo. at 111:22 ­ 112:5 (confirming that ICC removed and hauled over 9.7 million cubic yards of overburden and waste rock to SCMCI designated dump areas from 1985 through 1989). As noted above, plaintiff mistakenly tries to equate amount of work with degree of control; here, however, plaintiff has even gotten the amount of TIC's work wrong. 2. TIC had no control over the "disposal" of materials resulting in the ARD contamination.

Even assuming for the sake of argument that some of TIC's construction work caused a "release" of soil leading to ARD contamination at the site, TIC nevertheless lacked the sufficient control over the site to be an operator under CERCLA. As Judge Nottingham observed in his summary judgment orders in the Friedland litigation, operator liability requires a nexus between the entity's control and the hazardous waste contained at the facility. Ex. A-42, Order and 15

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Memorandum of Decision at 16; Friedland, 173 F. Supp. 2d at 1094-95; see also Geraghty & Miller, Inc. v. Conoco, Inc., 234 F.3d 917, 928 (5th Cir. 2000) ("[T]here must be some nexus between that person's or entity's control and the hazardous waste contained in the facility.") More than casual or occasional involvement in the decision-making process is required. See City of Wichita v, Trustees of the Apco Oil Corp. Liquidating Trust, 306 F. Supp. 2d 1040, 1055 (D. Kan. 2003). To be an operator, a party must make "the relevant decisions on a frequent, typically day-to-day, basis." Id. Here, as discussed in section I.A.2 above, TIC did not "direct the workings of, manage, or conduct the affairs of" the site. In particular, TIC had no control or authority over the "disposal" of soil allegedly leading to ARD contamination. Again, plaintiff's claim that TIC's activities "caus[ed] the discharge of ARD," Pl. memo at 21, even if assumed to be true, is not sufficient for operator status. Plaintiff has identified no evidence that TIC had any policy- or decision-making role at all in: · · · · · the design of the earthwork and other digging; the engineering of the earthwork or other digging; where the earth to be moved would come from, and where it would go; how the earth would be moved (e.g., equipment, procedures, timing, speed), or how any extra dirt would be disposed of. Instead of focusing on actual control of the site with respect to earthwork and digging, plaintiff in effect argues that any contractor who moves soil that has the potential to generate ARD is liable as an operator. That clearly is not the law. A contractor might be held liable as an operator if it exercised the necessary degree of control over the disposal. See, e.g., Kaiser

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Aluminum & Chem. Corp. v. Catellus Dev. Corp., 976 F.2d 1338, 1341 (9th Cir. 1992) (concluding that operator liability "only attaches if the defendants had the "authority to control the cause of the contamination at the time that hazardous substances were released into the environment"). Where such control is lacking, however, no operator liability exists. See, e.g., Interstate Power, 909 F. Supp. at 1288-89 (finding no operator liability where "[i]t is undisputed that all of [the defendant's] actions were taken at the direction of other parties . . . [the defendant] did [not do] anything that they were not directed to do." (emphasis added)). Here, as in Interstate Power, everything that TIC did at the site was at the direction of others, specifically Bechtel. TIC simply lacked the control necessary for operator liability. 3. TIC did not dispose of hazardous substances.

TIC also cannot be held liable as an operator for the release of ARD because it did not dispose10 of any hazardous substances. The earthen materials excavated and spread at the Mine were naturally occurring and did not contain introduced contaminants. See Caterair Int'l Corp. v. LCL Transit Co., Inc., 1995 WL 348045, at *5 (N.D. Ill. 1995) ("[n]aturally occurring substances do not entail liability under CERCLA"). No hazardous substance was released by the alleged digging; instead, the earthen materials only may have released hazardous substances later, after they began chemically reacting with the environment. Plaintiff offers no authority suggesting that TIC can be held liable as an operator based solely on later natural chemical reactions by naturally occurring elements in soil that TIC moved.11

10

CERCLA defines "disposal" as "the discharge, deposit, injection, dumping, splitting, leaking, or placing of any solid waste or hazardous waste . . . into or on any land." 42 U.S.C. § 9601(29) (adopting the definition in § 6903(3)). 11 Cf. Joslyn Mfg. Co. v. T.L. James & Co., Inc., 836 F. Supp. 1264, 1270 (D. La. 1993) ("This court does not agree . . . that . . . liability should be extended to all prior owners solely on the basis that rainfall obviously causes

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Likewise, TIC's digging did not "exacerbate" any contamination at the Mine. Where exacerbation of contamination is claimed, a "disposal" only occurs when a party exacerbates the extent of chemical contamination by spreading contaminated soil over uncontaminated areas of a property. See Alcan-Toyo Am., Inc. v. N. Ill. Gas Co., 881 F. Supp. 342, 346 (N.D. Ill. 1995) (finding no "disposal" where contaminated soil was moved to an already contaminated area). Even assuming that the naturally occurring soil constituents that can produce ARD constitute "hazardous substances," 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. Any earthen materials that TIC may have moved on the site therefore could not have exacerbated any contamination and did not constitute a disposal. 12 To hold otherwise would lead to the absurd result that anyone who turned a shovel in the Rocky Mountain West would be a CERCLA-liable operator. Plaintiff's response on this issue again draws a legal distinction, but then is unable or unwilling to apply it to the facts at hand. Plaintiff correctly notes that some courts have held that earthmoving can, under some circumstances, constitute a "disposal" under CERCLA. See. Pl. memo at 21-22. From this unremarkable proposition, however, plaintiff leaps to the conclusion that TIC's digging "dispersed contaminated soil throughout the Mine, causing the release of hazardous substances into the environment." Id. Nowhere in plaintiff's response, however, does
hazardous materials to leach through the soil"); Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 887 (9th Cir. 2001) (holding that gradual passive migration of contamination through soil was not disposal); United States v. Petersen Sand and Gravel, Inc., 806 F. Supp. 1346, 1351-52 (D. Ill. 1992) (stating that giving disposal passive content would "eviscerate" the purpose of CERCLA and that the kind of migration contemplated by "leaking" and "spilling" is "itself an entering of the environment; it is not a predicate to entering the environment). 12 See Bob's Beverage, Inc. v. Acme, Inc., 264 F.3d 692, 697 (6th Cir. 2001) (no CERCLA liability where a pollutant was already present in the soil); see also Brookfield-North Riverside Water Comm'n v. Martin Oil Mktg., Ltd., 1992 U.S. Dist. Lexis 2920, at *29 (N.D. Ill. 1992) (dismissing based on absence of allegation that soil the defendant moved was contaminated when the defendant moved it).

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he provide any support, either factual or legal, for the assertions that the soil TIC handled in its natural state was "contaminated," or that "dispersal" of that soil to other areas containing the same naturally occurring constituents constitutes a "release of hazardous substances." In sum, plaintiff has offered no evidence that TIC disposed of any hazardous substances in connection with the ARD at the site, and TIC is entitled to judgment as a matter of law on the issue of operator liability. II. TIC is Not an "Arranger" under CERCLA Plaintiff also seeks to hold TIC liable as a person who by contract, agreement, or otherwise arranged for disposal or treatment...of hazardous substances owned or possessed by such person, by any other party or entity, at any facility ... owned or operated by another party or entity and containing such hazardous substances. 42 U.S.C. § 9607(a)(3). A prima facie case of arranger liability requires at the least a showing that (a) the substances disposed of were "hazardous" under CERCLA; (2) the defendant "owned or possessed" the substances; and (3) the defendant "arranged for" disposal of the substances. Id.; United States v. Friedland, 173 F. Supp. 2d 1077, 1099 (D. Colo. 2001) (citing Raytheon Constructors, Inc. v. ASARCO, Inc., 1998 WL 1742603, *9 (D. Colo. Apr. 17, 1998)). Plaintiff's arranger claims against TIC does not meet these requirements for several reasons. A. The Court's prior decision in Friedland disposes of plaintiff's claim.

This Court has effectively addressed this issue already in the earlier Friedland CERCLA litigation, in which the same plaintiff made virtually identical claims of arranger liability against Bechtel. See United States v. Friedland, No. 96-N-1213 (D. Colo. June 12, 2001), Ex. A-25, Order and Memorandum of Decision. The only difference here is that the facts plaintiff argues

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in support of his claim against TIC are even weaker than those that he argued against Bechtel in Friedland. In Friedland, plaintiff argued that Bechtel had both constructive possession of and decision-making authority over the hazardous wastes at the site. The Friedland court rejected this claim, providing a discussion that is worth quoting at length: The record before the court indicates that Bechtel exercised no decision-making control with regard to the disposal of the hazardous waste rock at the Summitville Mine. Third-party plaintiffs contend that "Bechtel was actively and inextricably involved in making, directing and implementing critical project management and oversight decisions, decisions which led to potential releases of hazardous substances at the site." ... In support of this proposition, third-party plaintiffs note that "[t]hrough its global role, its day-to-day operational and directional control over design, project coordination, earthmoving and installation of the well cans and its involvement in diagnosing and solving the cyanide leak problems, Bechtel exercised constructive possession and control over hazardous substances generated at the site." ...I disagree. Simply because Bechtel was involved in pre-operational consultation and limited decision-making with respect to the Summitville Mine's heap-leaching project, an operation that necessarily entailed the presence of hazardous wastes, does not establish arranger liability. Third-party plaintiffs have proffered no evidence suggesting that Bechtel controlled, or had the authority to control, the actual decision where to deposit the waste at the Summitville Mine. Absent such indicia of control, I cannot say that Bechtel constructively possessed the hazardous substances present at the Summitville Mine. Based on the foregoing, I find that Bechtel possessed no discretionary authority with respect to disposal of the waste rock, and therefore neither owned nor possessed (either directly or constructively) the Summitville Mine waste. Thus, I find that Bechtel is not liable as an arranger under CERCLA in light of third-party plaintiffs' failure to proffer sufficient facts necessary to establish their prima facie case of arranger liability under CERCLA. Ex. A-25, Order and Memorandum of Decision at 21. Given this Court's rejection of the arranger liability claim against Bechtel in Friedland, it follows a fortiori that plaintiff's arranger liability claim against TIC must fail here. As set forth above and in TIC's original moving papers, Bechtel had a far greater role in the operation and decision-making at the site than even plaintiff can argue TIC had. Bechtel was in charge of and 20

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responsible for the design and construction of the mine processing facilities; Bechtel had total responsibility for TIC's work; and Bechtel directed and oversaw all of TIC's activities. See, e.g., Exs. A-8 at 2; A-26, Hotaling Aff. at ¶¶ 6, 7, 17. If Bechtel lacked sufficient decision-making authority to be liable as an "arranger" under CERCLA--as this Court has found--then plaintiff's arranger claim against TIC, which had no authority at all, necessarily fails as a matter of law. B. TIC never had constructive ownership of the materials at issue.

Even if the Court had not already decided Friedland, the undisputed facts here establish several other grounds to dismiss plaintiff's arranger claims against TIC. First, TIC never actually or constructively owned or possessed the waste materials involved, as required for imposition of arranger liability. E.g., Raytheon Constructors, Inc. v. ASARCO, Inc., 368 F.3d 1214, 1219 (1st Cir. 2003). With respect to the HLP-generated waste, plaintiff admits that TIC was gone from the site long before the leaching process even began. Pl. memo at 8-9. Thus, TIC could not possibly have constructively possessed waste that did not even exist during TIC's work at the site. With respect to the movement of soil at the site, plaintiff has offered no evidence that TIC ever constructively "owned" the soil in the sense of the discretionary authority Judge Nottingham discussed in Friedland. TIC performed all of its work under the direction of Bechtel; nothing in plaintiff's offerings suggests that TIC had any authority at all over the removal, transportation, placement, or disposal of any earthen materials. E.g., A-26, Hotaling Aff. ¶ 17. If TIC's conduct is sufficient to establish constructive possession, then, again, anyone who turns a spade could be liable as a CERCLA arranger. This is not the law.

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Plaintiff's response on this issue again draws a distinction but fails to apply it here. Plaintiff cites United States v. Northeastern Pharmaceutical & Chemical Co., 810 F.2d 726 (8th Cir. 1987) for the proposition that "a party need not have actual ownership or possession of the waste to fall within the scope of arranger liability." Pl. memo at 25. Plaintiff's statement is of course true, but he is unable to apply it directly to the facts here. Like Friedland and all the other cases, the Northeastern case focuses on the issue of control. The defendant in Northeastern was an individual who "had immediate supervision over, and was directly responsible for arranging for the transportation and disposal of the ... plant's hazardous substances at the ... site." 810 F.2d at 743. Plaintiff can point to no such facts here. Again, as with operator liability, plaintiff mistakenly tries to substitute evidence of substantial activity for evidence of control. The law requires actual evidence of authority and control, and plaintiff simply cannot provide it. Plaintiffs' claim that TIC bears arranger liability for the ARD contamination fails as a matter of law. 13

13

Plaintiff's arranger liability claim against TIC is also vulnerable on a number of other points. First, as discussed in section I.B.3 above, the earthen materials at the mine site were not themselves hazardous waste. Second, section 107(a)(3) requires that an arranger have "arranged with a transporter for transport for disposal or treatment...by any other party or entity." Plaintiff has never explained how TIC's alleged digging (whatever its scope) could possibly fit this description or identified the required "other party or entity." Finally, as discussed in TIC's opening brief, plaintiff has offered no evidence that TIC ever had any intent to dispose of hazardous substances with respect to either the HLP or the ARD contamination. Contrary to plaintiff's assertions concerning Eighth Circuit law, the issue of intent is clearly a factor in arranger liability in this Court. Mathews v. Dow Chemical Co., 947 F. Supp. 1517, 1525 (D. Colo. 1996); see also Concrete Sales and Servs., Inc. v. Blue Bird Body Co., 211 F.3d 1333, 1336-37 (11th Cir. 2000) (stating that factors relevant to the arranger analysis include "whether the party intended to dispose of a substance" and holding that a defendant could not be liable because the evidence was insufficient to establish it intended to dispose of hazardous substances); South Florida Water Mgt. Dist. v. Montalvo, 84 F.3d 402, 406-07 (11th Cir. 1996). Given the compelling grounds for summary judgment cited in the text, however, the Court need not reach these issues to decide this motion.

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CONCLUSION For all of the foregoing reasons, Defendant TIC respectfully requests that the Court enter summary judgment in TIC's favor and against Plaintiff Robert M. Friedland on all claims for relief in Plaintiff's Amended Complaint, and that it grant such other and further relief as the Court deems just and reasonable.

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Respectfully submitted this 3rd day of May, 2006.

s/ Colin C. Deihl Colin C. Deihl, Esq. Faegre & Benson LLP 3200 Wells Fargo Center 1700 Lincoln Street Denver, CO 80203 Telephone: (303) 607-3651 FAX: (303) 607-3600 E-mail: [email protected] Delmar R. Ehrich, Esq. Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, Minnesota 55402 Attorneys for Defendant The Industrial Company

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CERTIFICATE OF MAILING

I hereby certify that on this 3rd day of May, 2006, a true and correct copy of the foregoing DEFENDANT TIC ­ THE INDUSTRIAL COMPANY'S REPLY MEMORANDUM IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT was electronically filed via Electronic Case Filing (ECF) with the United States District Court for the District of Colorado and served electronically on the following:

John D. Fognani, Esq. R. Kirk Mueller, Esq. Lauren C. Buehler, Esq. Perry L. Glantz, Esq. Fognani & Faught, PLLC 1700 Lincoln Street, Suite 2222 Denver, Colorado 80203 Terence M. Ridley, Esq. Wheeler Trigg Kennedy LLP 1801 California St., Suite 3600 Denver, Colorado 80202-2617 Paul J. Sanner, Esq. Hanson, Bridgett, Marcus, Vlahos & Rudy, LLP 333 Market Street, Suite 2100 San Francisco, California 94105-2173

s/ Jan Sullivan

M2:20793610.08

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