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Stone v. High Mountain Mining Co., LLC

United States District Court, D. Colorado

March 5, 2018

PAMELA STONE, a citizen of the United States, TWYLA RUSAN, a citizen of the United States, M. JAMIE MORROW, a citizen of the United States, THE SOUTH PARK COALITION, INC., a non-profit 501c4 Colorado corporation, and BE THE CHANGE USA, a non-profit 501c4 Colorado corporation, Plaintiffs,
v.
HIGH MOUNTAIN MINING COMPANY, LLC, a Wyoming limited liability company, and JAMES R. MURRAY, a citizen of the United States, Defendants.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          Kathleen M. Tafoya, Magistrate Judge

         This case comes before the court on “High Mountain Mining Company's and James S. Murray's Motion to Dismiss Complaint” (Doc. No. 13 [Mot.], filed July 11, 2017). Plaintiffs filed their response on August 1, 2017 (Doc. No.22 [Resp.]), and Defendants filed their reply on August 15, 2017 (Doc. No. 24 [Reply]).

         STATEMENT OF THE CASE

         Plaintiffs bring claims pursuant to the Federal Water Pollution Control Act, more commonly referred to as the Clean Water Act (“CWA”), 33 U.S.C. § 1251, et seq., against Defendant High Mountain Mining Co, LLC (“High Mountain”), which operates the Alma Placer Mine, which Plaintiffs allege has discharged pollutants from its lands into the Middle Fork of the South Platte River (“Middle Fork”) without a National Pollution Discharge Elimination System permit or “dredge and fill” permit, in violation of §301, §402, and §404 of the CWA, 33 U.S.C. §§1311, 1342 and 1344. (See Doc. No. 1 [Compl.].) Plaintiffs also assert claims against Defendant James R. Murray, the managing member (owner) of High Mountain Mining, on the same bases. (Id.)

         STANDARDS OF REVIEW

         A. Lack of Subject Matter Jurisdiction

         Federal Rule of Civil Procedure Rule 12(b)(1) empowers a court to dismiss a complaint for lack of subject matter jurisdiction. Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case. Rather, it calls for a determination that the court lacks authority to adjudicate the matter, attacking the existence of jurisdiction rather than the allegations of the complaint. See Castaneda v. INS, 23 F.3d 1576, 1580 (10th Cir. 1994) (recognizing federal courts are courts of limited jurisdiction and may only exercise jurisdiction when specifically authorized to do so). The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction. Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974). A court lacking jurisdiction “must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” See Basso, 495 F.2d at 909. The dismissal is without prejudice. Brereton v. Bountiful City Corp., 434 F.3d 1213, 1218 (10th Cir. 2006); see also Frederiksen v. City of Lockport, 384 F.3d 437, 438 (7th Cir. 2004) (noting that dismissals for lack of jurisdiction should be without prejudice because a dismissal with prejudice is a disposition on the merits which a court lacking jurisdiction may not render).

         A Rule 12(b)(1) motion to dismiss “must be determined from the allegations of fact in the complaint, without regard to mere conclusionary allegations of jurisdiction.” Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir. 1971). When considering a Rule 12(b)(1) motion, however, the Court may consider matters outside the pleadings without transforming the motion into one for summary judgment. Holt v. United States, 46 F.3d 1000, 1003 (10th Cir. 1995). Where a party challenges the facts upon which subject matter jurisdiction depends, a district court may not presume the truthfulness of the complaint's “factual allegations . . . [and] has wide discretion to allow affidavits, other documents, and [may even hold] a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1).” Id.

         B. Failure to State a Claim Upon Which Relief Can Be Granted

         Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may move to dismiss a claim for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6) (2007). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiffs complaint alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (citations and quotation marks omitted).

         “A court reviewing the sufficiency of a complaint presumes all of plaintiff s factual allegations are true and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1198 (10th Cir. 1991). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff pleaded facts which allow “the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The Iqbal evaluation requires two prongs of analysis. First, the court identifies “the allegations in the complaint that are not entitled to the assumption of truth, ” that is, those allegations which are legal conclusion, bare assertions, or merely conclusory. Id. at 679-81. Second, the Court considers the factual allegations “to determine if they plausibly suggest an entitlement to relief.” Id. at 681. If the allegations state a plausible claim for relief, such claim survives the motion to dismiss. Id. at 679.

         Notwithstanding, the court need not accept conclusory allegations without supporting factual averments. Southern Disposal, Inc., v. Texas Waste, 161 F.3d 1259, 1262 (10th Cir. 1998). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S at 678. Moreover, “[a] pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.' Nor does the complaint suffice if it tenders ‘naked assertion[s]' devoid of ‘further factual enhancement.'” Id. (citation omitted). “Where a complaint pleads facts that are ‘merely consistent with' a defendant's liability, it ‘stops short of the line between possibility and plausibility of ‘entitlement to relief.' ” Id. (citation omitted).

         ANALYSIS

         A. CWA Notice Requirements and Applicable Law

         The Clean Water Act provides for citizen suits, which may be commenced by “any citizen” against a person or entity “alleged to be in violation of” effluent standards or limitations under the Act or related orders. See generally 33 U.S.C. § 1365(a). Such citizen suits require that a 60-day notice letter be sent prior to commencing litigation, as set out by Section 505(b) of the Act. See 33 U.S.C. § 1365. Environmental Protection Agency has promulgated the following regulation regarding 60-day notice letters prerequisite to CWA citizen suits:

Violation of standard, limitation or order. Notice regarding an alleged violation of an effluent standard or limitation or of an order with respect thereto, shall include sufficient information to permit the recipient to identify [1] the specific standard, limitation, or order alleged to have been violated, [2] the activity alleged to constitute a violation, [3] the person or persons responsible for the alleged violation, [4] the location of the alleged violation, [5] the date or dates of such violation, and [6] the full name, address, and telephone number of the person giving notice.

40 C.F.R. § 135.3(a) (italicized text in original).

         Controlling case law has strictly construed the notice requirements set out above. In Hallstrom v. Tillamook County, 493 U.S. 20 (1989), the Supreme Court addressed “whether compliance with the 60-day notice provision is a mandatory precondition to suit or can be disregarded by the district court at its discretion, ” id. at 23, and concluded that the requirement is a “mandatory conditio[n] precedent to commencing suit, ” id. at 31, and “a specific limitation on a citizen's right to bring suit, ” id. at 26. Hallstrom observed that the notice requirement “strike[s] a balance between encouraging citizen enforcement . . . and avoiding burdening the federal courts with excessive numbers of citizen suits, ” and concluded that “[g]iving full effect to the words of the statute preserves the compromise struck by Congress.” Id.

         Hallstrom held that dismissal was the correct remedy for non-compliance with the notice requirement, noting although the Court was “sympathetic” to the possibility that dismissal “would unnecessarily waste judicial resources, ” dismissal would nevertheless “further the congressional purpose of giving agencies and alleged violators a 60-day nonadversarial period to achieve compliance.” Id. at 32. Therefore, “where a party . . . fails to meet the notice and 60- day delay requirements . . . the district court must dismiss the action as barred by the terms of the statute.” Id.

         Following Hallstrom, the Tenth Circuit has embraced a strict approach to the notice requirement. In New Mexico Citizens for Clean Air v. Espanola Mercantile Co., Inc., 72 F.3d 830, 833 (10th Cir. 1996) (“New Mexico Citizens”), plaintiffs included both a citizens' group and the Pueblo of San Juan. “The citizens group gave the sixty-day notice . . . but the Pueblo did not.” 72 F.3d at 832. While the court observed that “some district courts have adopted a pragmatic view that notice by one plaintiff acts as notice by all, ” it expressly rejected that approach. Id. at 833. The court emphasized that “the purpose of pre-suit notice is to allow . . . a nonadversarial time period” to seek a resolution and “[i]f the defendant and the agencies do not know the parties involved, effective negotiation is not possible.” Id. (citing Washington Trout v. McCain Foods, Inc., 45 F.3d 1351, 1352-54 (9th Cir. 1995)). New Mexico Citizens also reiterated the statement from Hallstrom endorsing “strict adherence to the procedural requirements, ” as “the best guarantee of even-handed administration of the law.” Id. at 833 (quoting Hallstrom, 493 U.S. at 31). The court therefore held that “one plaintiff's compliance with the pre-suit notice requirements of the Clean Water Act . . . does not satisfy the duty of another plaintiff to give notice on its own behalf, ” id. at 831, and that “failure to give proper notice before bringing suit” meant the Pueblo “was not a proper party to the action, ” id. at 833.

         More recently, in Karr v. Hefner, 475 F.3d 1192 (10th Cir. 2007), the plaintiffs had sent a 60-day notice letter, but the Tenth Circuit reviewed whether its contents were sufficient to meet the requirements of 33 U.S.C. § 1365(b) and 40 C.F.R. § 135.3(a)-the same analysis which the Court must undertake here. Karr first observed that the “guiding principle” of the notice requirement “is to give the [alleged violator] an opportunity to bring itself into complete compliance with the Act and thus . . . render unnecessary a citizen suit.” Karr, 475 F.3d at 1200 (internal quotation marks omitted). “Accordingly, notice is to be evaluated from the recipient's perspective, and the notice's identification of the alleged violations must be clear.” Id. Karr also stated that it is insufficient if the notice “generally orients the . . . violator as to the type of violation.” Id. (quoting Cal. Sportfishing Prot. Alliance v. City of W. Sacramento, 905 F.Supp. 792, 799 (E.D. Cal. 1995)). Rather, “the recipient of the notice must understand from the notice what the citizen is alleging-not what the citizen could allege if the citizen knew more.” Id. (emphasis in original).

         Reviewing decisions in other courts, Karr further noted that notice letters must “provid[e] enough information to make the defendant's alleged violations easy to understand, ” and cited approvingly to a notice letter that “listed at least specific pollutants, specific locations, and specific permits the defendant was alleged to have violated.” Id. at 1201 (citing Waterkeepers N. Cal. v. AG Indus. Mfg., ...


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