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United States Government Is Liable As An “Owner” for Superfund

Jul 19, 2017 | by William Perry Pendley

DENVER, CO.  The U.S. Court of Appeals for the Tenth Circuit today ruled, consistent with an amici curiae brief filed by two century old mining associations, that the federal government shares “Superfund” liability for waste sites on federal land.  In so ruling, the three-judge panel overturned the ruling of a federal district court in New Mexico.  The panel ruled the United States is ‘an “owner,’ and, therefore, a [potentially responsible party (PRP)], because it is strictly liable for its equitable portion of the costs necessary to remediate the contamination arising from mining activity on federal land.”  The American Exploration & Mining Association, founded in 1895, is a nonprofit, nonpartisan, trade association in Washington State with 2,300 members in 42 states and 11 countries.  The Colorado Mining Association, founded in 1876, is a nonprofit trade association that represents 1,050 members of the Colorado mining industry.  Both disputed a September of 2015 ruling that the government is not liable for remediation costs at a mining site in northern New Mexico in the Carson National Forest under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), even though the government held title to the lands and exercised oversight over them when the mine waste disposal occurred.

“We are thrilled with the panel’s ruling and its recognition of important aspects of the General Mining Law that we brought to its attention,” said William Perry Pendley of Mountain States Legal Foundation (MSLF); MSLF represents the two mining associations.

The Questa Mine has produced molybdenum—used to strengthen steel for industrial uses—since 1919 when opened by R&S Molybdenum Company of Denver.  Molybdenum Corporation of America was its successor in interest and Chevron Mining, Inc. acquired the mine in 2005.  From 1919 to 1958, the ore was developed by conventional underground mining, but was closed until demand for molybdenum increased.  Then Congress authorized and the United States contracted with Molycorp to conduct exploration, drilling, and sampling to determine if further production at the Questa Mine was feasible; thereafter, from 1964 to 1983, Molycorp engaged in open-pit mining at the Questa Mine, from which the vast majority of the waste rock at issue was generated.  In 1983, underground mining resumed and continued until 2014.

When the United States contracted with Molycorp, Molycorp had located 2,226 acres of lode claims near existing operations and was using those lands for waste rock disposal.  At the request of the United States, Molycorp agreed to relinquish its claims and engage in a land exchange with the United States.  By that time, Molycorp had already disposed of 80 percent of the waste rock ultimately dumped on the selected lands.

In 2000, New Mexico requested that the Environmental Protection Agency list the mine as a Superfund site under CERCLA.  In 2010, the EPA’s decision doing so found that the cost of remediation could reach $1 billion.

Mountain States Legal Foundation, founded in 1977, is a nonprofit, public-interest legal foundation dedicated to individual liberty, the right to own and use property, limited and ethical government, and the free enterprise system.  Its offices are in suburban Denver, Colorado.

For more information:  Chevron Mining Inc. v. United States of America


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