United States District Court, D. Colorado
KRISTEN L. MIX, Magistrate Judge.
This matter is before the Court on Defendants' Motion to Stay [#29] (the "Motion") and Plaintiff's Opposed Motion to File a Surreply in Opposition to Defendants' Motion to Stay [#44] (the "Surreply Motion"). Plaintiff filed a Response [#34] to the Motion and Defendants IRG Bayaud, LLC ("IRG") and Brent Anderson ("Anderson" and collectively with IRG, the "Moving Defendants") filed a Reply [#43] in further support of the Motion. Pursuant to 28 U.S.C. § 636(b)(1) and D.C.COLO.LCivR 72.1(c), the Motion and the Surreply Motion have been referred to the undersigned for disposition [##30, 49]. The Court has reviewed the Motion, the Response, the Reply, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Surreply Motion [#44] is DENIED and the Motion [#29] is DENIED.
A. Procedural Background
Plaintiff initiated this lawsuit against the Moving Defendants on April 23, 2014. See generally Complaint [#1]. In sum, Plaintiff alleges that Defendant IRG owns and operates a former mining site located on the western bank of the South Platte River. Compl. [#1] ¶¶ 2-4. Plaintiff further alleges that the former mining site discharges various pollutants into the South Platte River in violation of the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq. (the "Clean Water Act"). Id. ¶¶ 6-10. In support of this contention, Plaintiff alleges that "[d]ischarges of pollutants are only authorized under the [Clean Water Act] if they meet the specific effluent limitations contained in" the National Pollutant Discharge Elimination System permit (the "Permit") issued to Defendant IRG. Id. ¶ 7. The Permit was issued by the Water Control Quality Division of the Colorado Department of Public Health and the Environment (the "Division"). Id. Plaintiff alleges that the Moving Defendants violated the Clean Water Act (1) because the site has discharged pollutants in amounts that exceed those allowed by the Permit, id. ¶ 9 ("Defendants' acidic discharges have occurred virtually every month since IRG received their Permit in March 2008 and have significantly exceeded the authorized effluent limitations in the [P]ermit."), and (2) because Defendant IRG informed the Division on January 31, 2014 that it would no longer perform any of the obligations required by the Permit and has not performed those obligations since January 2014. Id. ¶¶ 11, 89-101. As a result, in the initial Complaint Plaintiff brought two claims against the Moving Defendants for violations of the Clean Water Act. Id. ¶¶ 104-115. The first claim is premised on the Moving Defendants' alleged discharge of pollution into the South Platte River in violation of the Permit. Id. ¶¶ 104-109. The second claim is premised on the Moving Defendants' alleged failure to perform monthly monitoring obligations as required by the Permit. Id. ¶¶ 110-115. The second claim is based, among other things, on allegations regarding the Moving Defendants' failure to "perform any monitoring obligations" as of January 2014, as well as its failure to ever "report instances of its pH effluent limitations non-compliance...." Id. ¶¶ 89-93.
On June 6, 2014, the Moving Defendants filed two motions: (1) Defendants' Motion for Dismissal Without Prejudice or for Stay [#17], in which they argued that the Court should stay or dismiss this action pursuant to the doctrine of primary jurisdiction, and (2) Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6) [#18].
On June 26, 2014, Plaintiffs filed their First Amended Complaint for Declaratory and Injunctive Relief and Civil Penalties [#20] (the "First Amended Complaint") that eliminated a previously named defendant and continued to assert the two claims discussed above against the Moving Defendants. See generally Plaintiff's Notice of Filing First Amended Complaint as a Matter of Course, Ex. 1 [#21-1] (redline). As a result of the filing of the First Amended Complaint, the Court denied as moot Defendants' Motion for Dismissal Without Prejudice or for Stay [#17] and Defendants' Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6) [#18] without addressing the merits of either motion.
On July 21, 2014, Defendants filed the instant Motion [#29] requesting a stay.
On August 19, 2014, while briefing of the instant Motion was ongoing, Plaintiff filed its Second Amended Complaint for Declaratory and Injunctive Relief and Civil Penalties [#39] (the "Second Amended Complaint"). In the Second Amended Complaint, Plaintiff added Defendant City and County of Denver ("Denver"), added factual allegations, added one claim, and clarified against whom the claims are brought. See generally Plaintiff's Notice of Filing Second Amended Complaint with Written Consent of Defendants, Ex. 1 [#40-1] (redline). In the Second Amended Complaint, Plaintiff continues to assert a claim against the Moving Defendants under the Clean Water Act for alleged violations of the conditions imposed by the Permit. Plaintiff brings its second Clean Water Act claim against all Defendants for the alleged discharge of pollutants after the termination of the Permit, if the Court determines that the Permit was terminated. Finally, Plaintiffs add a claim against all Defendants under the Resource Conservation and Recovery Act (the "RCRA"), 42 U.S.C. § 6972(a)(1)(B). In support of its claims against Defendant Denver, Plaintiff avers that Defendant Denver "took ownership of the property from IRG in 2009." Second Am. Compl. [#39] ¶ 3. Plaintiff further alleges that Defendant IRG installed "a concrete cap to prevent oxygenated rain and surface water from contacting the underground mining waste, " but that "by depleting the oxygen in the [property's] groundwater, " the cap has "adversely altered the groundwater chemistry beneath the" property. Id. ¶ 106. Plaintiff maintains that "[t]his has resulted in previously bound arsenic becoming mobile and being released in increasingly higher concentrations into the environment" since 2009 when the cap was installed. Id. ¶¶ 106-07. Plaintiff further alleges that the "groundwater beneath the [property] is hydrologically connected to the South Platte River... [which] serves as the drinking water for significant populations...." Id. ¶¶ 123-24.
B. The State Court Action
In support of their arguments, the parties provided certain documents and information about the status of the Permit and related state court action. The documents and briefing establish the following sequence of events:
The Permit was issued to Defendant IRG on March 7, 2008. Motion, Ex. 2 [#29-2] at 1.
On October 25, 2011, the Division sent a letter to Defendant IRG notifying it that pursuant to § 104(7) of the Administrative Procedures Act, Colo. Rev. Stat. § 24-4-101, et seq., the Permit remained in effect until a new permit was issued. Motion, Ex. 3 [#29-3] at 1.
The Permit states that it expired at midnight on October 31, 2011. Motion, Ex. 2 [#29-2] at 1.
On January 27, 2014, Defendant IRG submitted a withdrawal of its application for renewal of the Permit, signed by Defendant Anderson, stating that "there is no point source discharge from the facility." Motion, Ex. 4 [#29-4] at 2.
On April 11, 2014, the State of Colorado Department of Law sent the Moving Defendants a letter explaining that it "disagree[d] with your conclusion that IRG's withdrawal of the permit application terminated the Division's authority to act on the pending permit application and caused immediate expiration of the [ ] Permit...." Response, Ex. B [#34-2] at 1. The letter concluded by reminding the Moving Defendants that "IRG is legally required to comply with all CDPS sampling and monitoring requirements until the [P]ermit is modified or reissued by the Division, or IRG successfully goes through the permit termination process." Id. at 3.
On April 14, 2014, the Division sent a letter to the Moving Defendants informing them that it was "treating the [Permit] as an active, administratively-extended permit." Response, Ex. C [#34-3] at 1. In that letter, the Division outlined the standard it applies when determining if a permit may be terminated and further outlined the reasons why Defendant IRG had not met this standard. Id. at 1-4.
On May 8, 2014, Defendant IRG initiated a case with the Division regarding its request to withdraw its application for renewal of the Permit. See generally Motion, Ex. 5 [#29-5]. Defendant IRG requested that the Division hold a hearing regarding its determination that the Permit remained in effect. Id. at 4.
On June 6, 2014, the Division sent a letter to the Moving Defendants denying their request for a hearing. See ...