FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW
MEXICO (D.C. NO. 1:13-CV-00328-MCA-KK)
D. Keisler, Sidley Austin LLP (Jennifer G. Anderson, Alex C.
Walker, and Jeremy K. Harrison, Modrall, Sperling, Roehl,
Harris & Sisk, P.A., Albuquerque, New Mexico, R. Timothy
McCrum, Kirsten L. Nathanson, and Sherrie A. Armstrong,
Crowell & Moring LLP, Washington, D.C., and Quin M.
Sorenson and Christopher A. Eiswerth, Sidley Austin LLP,
Washington, D.C., with him on the briefs), Washington, D.C.,
Katherine J. Barton, Environment & Natural Resources
Division, United States Department of Justice (John C.
Cruden, Assistant Attorney General, Simi Bhat, Justin D.
Heminger, Dustin J. Maghamfar, John E. Sullivan, and Evelyn
S. Ying, Environment & Natural Resources Division, United
States Department of Justice, and of Counsel: Joan Marsan,
Office of the Solicitor, United States Department of the
Interior, and Kirk Minckler, Office of the General Counsel,
United States Department of Agriculture, with her on the
brief), Washington, D.C. for Appellees.
Cannan and Steven J. Lechner, Mountain States Legal
Foundation, Lakewood, Colorado, on the brief for Amici Curiae
American Exploration & Mining Association and Colorado
Timothy C. Fox, Montana Attorney General, Alan Joscelyn,
Chief Deputy Attorney General, and Dale Schowengerdt,
Solicitor General, Office of the Montana Attorney General,
Helena, Montana, on the brief for Amicus Curiae State of
TYMKOVICH, Chief Judge, BALDOCK, and BRISCOE, Circuit Judges.
TYMKOVICH, Chief Judge.
the federal environmental laws, the owner of property
contaminated with hazardous substances or a person who
arranges for the disposal of hazardous substances may be
strictly liable for subsequent clean-up costs. In this case,
the United States owned national forest lands in New Mexico
that were mined over several generations by Chevron Mining
Inc. The question we must resolve is whether the United
States is a "potentially responsible party" (PRP),
see, e.g., 42 U.S.C. § 9620(e)(6), for the
environmental contamination located on that land.
conclude that under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 (CERCLA), 42 U.S.C.
§§ 9601-75, the United States is an "owner,
" and, therefore, a 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. We also conclude in this case that the United States
cannot be held liable as an "arranger" of hazardous
substance disposal because it did not own or possess the
substances in question.
jurisdiction pursuant to 28 U.S.C. § 1291, we therefore
reverse the district court in part and affirm in part, and
remand for further proceedings to determine the United
States's equitable share, if any,  of the clean-up
the last century, Chevron and its corporate predecessors
mined molybdenum at a site near Questa, New Mexico, which we
and the parties refer to as the "Questa Site." This
extensive mining generated significant amounts of hazardous
substances, ultimately triggering costly clean-up
requirements. Both before and after the Environmental
Protection Agency (EPA)'s 2011 decision to place the
Questa Site on the National Priorities List (NPL),
see 42 U.S.C. § 9605(a)(8), Chevron
acknowledged its status as a PRP strictly liable for the
hazardous substances contaminating the site. Chevron began
remediation measures pursuant to three administrative orders
between it and the EPA. These measures are ongoing and
projected to continue for decades to come, with anticipated
costs exceeding $1 billion. Seeking financial contributions
for the clean-up, Chevron filed suit against the United
States asking for a declaration that the government is also
strictly liable as a PRP-both as an "owner" of
portions of the Questa Site and as an "arranger" of
hazardous substance disposal, see 42 U.S.C. §
9607(a)-for its equitable share of past, present, and future
clean-up costs. See 42 U.S.C. §
particular mining and disposal activities relevant to this
appeal are summarized below.
Mining Activities from 1919-2014
is a valuable mineral used in the production of
military-grade steel and other materials. Molybdenum mining
activities on the Questa mining lands progressed in three
stages: (1) initial underground mining and exploration from
1919 to 1964; (2) open-pit mining from 1964 to 1983; and (3)
renewed underground mining from 1983 to 2014.
Initial Underground Mining and Exploration (1919-1964)
1919, the R&S Molybdenum Company of Denver opened an
underground mine. The mine covered approximately 400 acres of
mostly public land on which R&S Molybdenum held
unpatented mining claims. The underground mine produced
relatively small quantities of molybdenum and associated
waste for several decades before R&S Molybdenum deemed
its reserves exhausted in the 1950s and underground mining
operations effectively ceased.
Congress passed the Defense Production Act of 1950 (DPA) to
"ensure the vitality of the domestic industrial
base" to supply necessary "materials and services
for the national defense." 50 U.S.C. § 4502(a)(1).
To facilitate production of such materials, the DPA
authorized a new federal agency within the Department of the
Interior, the Defense Mineral Exploration Administration
(DMEA). As part of its efforts to encourage exploration and
development of necessary materials, including molybdenum, the
DMEA provided loans to help finance private companies.
1957, R&S Molybdenum's successor-in-interest, the
Molybdenum Corporation of America (Molycorp), entered into
such a loan agreement with the DMEA. Molycorp and the DMEA
executed an Exploration Project Contract, under which the
federal government agreed to provide a loan covering up to
$255, 250 (i.e., half the estimated exploration
costs) in exchange for Molycorp's agreement to conduct
strategic exploratory mining on the Questa mining lands.
Under the contract, all work was subject to government
approval. App., Vol. 1, at 100 ("The location,
direction, inclination, extent, and methods of sampling the
work under the contract are subject to Government
approval."). Molycorp also agreed to repay the loan in
the form of production royalties, provide monthly progress
reports, and consult with and inform the government on all
phases of the work as it progressed. At this point, Molycorp
held twenty-one mining claims near Questa, all but two of
which were unpatented.
to the DMEA exploration contract, Molycorp conducted
extensive exploration from 1957 to 1960 and eventually
discovered a molybdenum ore deposit estimated to be 260
million tons in size. The Department of the Interior
certified the discovery in 1960 and Molycorp began mining
Open-Pit Mining (1964-1983)
1964, Molycorp opened an open-pit mine to extract molybdenum
from the ore deposit. The mine was a success and, at full
capacity, produced more than four million tons of molybdenum
annually (while simultaneously generating significant amounts
of waste). By 1966, Molycorp fully repaid the
government's loan under the DMEA contract via royalties
from mineral production and sales. Molycorp expanded its
mining activities to adjacent lands (not covered by the
initial federal contract) on which it held mostly unpatented
Renewed Underground Mining (1983-2014)
1983, Molycorp ceased open-pit mining operations and opened a
new underground mine. Union Oil Company of California
acquired the mine and, in 2005, Chevron acquired Union Oil.
After several years with little or no mineral production,
Chevron closed the underground mine in 2014.
Waste and Associated Disposal
mining activities produced corresponding amounts of waste
containing hazardous substances, now subject to CERCLA
remediation. Approximately 150 thousand tons of waste rock
were generated from the early underground mining operations,
328 million tons of waste rock and 75 million tons of
"tailings" from the open-pit mining, and 25 million
tons of tailings from the renewed underground mining.
substantial amount of waste generated by these mining
activities was not unexpected. When Molycorp first discovered
the molybdenum ore deposit in 1960, for example, government
engineers produced a "Final Geological and Engineering
Report" estimating over 99% of the material extracted
from the 260 million ton ore deposit would need to be
discarded as waste. See App., Vol. 3, at 681-84.
Nonetheless, the federal government actively encouraged-and,
indeed, funded-Molycorp's mining activities at this site.
substance disposal from the mines can be divided into two
categories: (1) waste rock disposal; and (2) mine tailings
Waste Rock Disposal
and its corporate predecessors disposed of over 328 million
tons of waste rock on land surrounding the open-pit mine.
Although Molycorp initially held only unpatented mining
claims on the these lands, it eventually acquired fee title
to 2, 258 acres of national forest land around the perimeter
of its open-pit mine (referred to as "the selected
lands") from the United States. In exchange for the selected
lands, Molycorp traded to the United States approximately 246
acres of private land usable for public recreation, hunting,
or other forest purposes. This land exchange was finalized in
Mine Tailings Disposal
and its corporate predecessors also disposed of over 100
million tons of mine tailings by transporting the tailings
via pipelines to one of two different "tailings
ponds" approximately nine miles away from the
open-pit mine. Of the two tailings ponds, the first was
located on approximately 627 acres of land acquired from the
Bureau of Land Management (BLM) in 1966. The second pond was
located on 439 acres of land acquired from the State of New
Mexico in 1968. Between 1965 and 1973, Molycorp sought and
received several "special use" land authorization
permits from the Forest Service for multiple tailings
pipelines, which crossed over 4.27 miles of national forest
lands to reach the two tailings ponds.