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Colorado Department of Public Health and Environment v. United States

United States District Court, D. Colorado

March 13, 2019




         This case concerns hazardous waste at the Rocky Mountain Arsenal, which is federally-owned land. Plaintiff's complaint alleges two claims implicating state and federal environmental laws. The matter is before the Court on the Recommendation of United States Magistrate Judge (the “Recommendation”) (ECF No. 42). The Recommendation addresses two separate motions to dismiss-one by Defendant Shell Oil Company (ECF No. 12) and the other by the “Federal Defendants, ” which consists of the United States of America, United States Department of the Army, and the United States Fish and Wildlife Service (ECF No. 37). The Recommendation concluded that each motion be granted in part and denied in part. (ECF No. 42 at 37-38.) Plaintiff, Shell, and Federal Defendants each filed objections to the Recommendation. (ECF Nos. 45, 46, 47.) Federal Defendants responded to Plaintiff's objections. (ECF No. 48.) Plaintiff responded to Federal Defendants' and Shell's objections. (ECF Nos. 49, 50.)

         For the reasons stated below, the Court SUSTAINS IN PART Plaintiff's objections, OVERRULES Shell's objections, OVERRULES IN PART and SUSTAINS IN PART Federal Defendants' objections, and AFFIRMS IN PART and REJECTS IN PART the Recommendation as provided herein. Shell's motion to dismiss is denied as to Plaintiff's first claim and granted as to Plaintiff's second claim. Federal Defendants' motion to dismiss is denied as to Plaintiff's first claim and granted as to Plaintiff's second claim as untimely to the extent it is based on failing to comply with the provisions of CERCLA 120(h) and otherwise as barred by sovereign immunity as to non-CERCLA bases.


         A. Review of the Magistrate Judge's Recommendation

         When a magistrate judge issues a recommendation on a dispositive matter, Fed.R.Civ.P. 72(b)(3) requires that the district court judge “determine de novo any part of the magistrate judge's [recommendation] that has been properly objected to.” “[T]he district court judge may accept, reject, or modify the recommendation; receive further evidence; or return the matter to the magistrate judge with instructions.” Id.

         An objection is proper if it is filed timely in accordance with the Federal Rules of Civil Procedure and specific enough to enable the “district judge to focus attention on those issues - factual and legal - that are at the heart of the parties' dispute.” United States v. One Parcel of Real Property, 73 F.3d 1057, 1059 (10th Cir. 1996) (quoting Thomas v. Arn, 474 U.S. 140, 147 (1985)). In the absence of a timely and specific objection, “the district court may review a magistrate's report under any standard it deems appropriate.” Summers v. Utah, 927 F.2d 1165, 1167 (10th Cir. 1991) (citations omitted); see also Fed. R. Civ. P. 72 Advisory Committee's Note (“When no timely objection is filed, the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.”).

         B. Rule 12(b)(1) Motion to Dismiss

         On a motion to dismiss pursuant to Rule 12(b)(1), the court tests whether it has subject matter jurisdiction to properly hear the case before it. The party invoking the court's jurisdiction bears the burden to establish that federal jurisdiction exists, and “since the courts of the United States are courts of limited jurisdiction, there is a presumption against its existence.” Basso v. Utah Power & Light Co., 495 F.2d 906, 909 (10th Cir. 1974).

         Rule 12(b)(1) motions generally take two forms. The first form is a facial attack that challenges the sufficiency of the complaint's allegations as to subject matter jurisdiction. Holt v. United States, 46 F.3d 1000, 1002 (10th Cir. 1995). The court accepts the allegations in the complaint as true when reviewing a facial attack. Id.

         The second form is a factual attack that goes beyond the allegations in the complaint and challenges the facts on which subject matter jurisdiction is based. Id. at 1003. Unlike a facial attack, the court does not presume the truthfulness of the complaint's factual allegations when reviewing a factual attack. Id. “A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1).” Id. (citation omitted). And “a court's reference to evidence outside the pleadings does not convert the motion to a Rule 56 motion[, ]” unless the jurisdictional issue is intertwined with the merits of a plaintiff's case. Id. “The jurisdictional question is intertwined with the merits of the case if subject matter jurisdiction is dependent on the same statute which provides the substantive claim in the case.” Id.

         C. Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim

         The purpose of a motion pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). “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 plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (internal quotation marks and citation omitted).

         To survive a Rule 12(b)(6) motion, “[t]he complaint must plead sufficient facts … to provide ‘plausible grounds that discovery will reveal evidence to support the plaintiff's allegations.” Shero v. City of Grove, Okl., 510 F.3d 1196, 1200 (10th Cir. 2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility in this context “must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs have not nudged their claims across the line from conceivable to plausible.” Robbins v. Oklahoma, 519 F.3d 1242, 1247-48 (10th Cir. 2008) (internal quotation marks and citation omitted). The “allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.” Id. This requirement of plausibility “serves not only to weed out claims that do not have a reasonable prospect of success, [but also to] provide fair notice to defendants of the actual grounds of the claim against them.” Id. at 1248; accord Twombly, 550 U.S. at 582.

         “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted).


         The parties do not object to the factual or procedural background discussed in the Recommendation. Accordingly, the Court adopts and incorporates the factual and procedural background included within the Recommendation as if set forth herein. To put the Court's analysis in context, a brief overview follows.

         The Rocky Mountain Arsenal is a hazardous waste treatment, storage, and disposal facility located near Commerce City, Colorado. The United States government has owned the facility since 1942 with the Army operating it from that time until the mid-1980's. Being one of the nation's most contaminated sites, a CERCLA interim response action was initiated in 1988 to remediate the contamination. Basin F of the facility was certified closed on August 24, 2010. Plaintiff's claims are twofold: (1) that defendants have failed to obtain a post-closure permit (or substitute document) as required by 6 Colo. Code Regs. § 1007-3:100.10-the Colorado Hazardous Waste Act (“CHWA”); and (2) that defendants transferred a parcel of Arsenal land outside the federal government (to Commerce City, Colorado) in violation of various agreements and laws. Plaintiff's second claim relies on the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq. (“CERCLA”), an On-Post Record of Decision (“ROD”) pursuant to CERCLA, and Colorado Executive Order D-013-98.

         Shell moves to dismiss Plaintiff's complaint on several grounds pursuant to Fed.R.Civ.P. 12(b)(1) and (6). First, Shell argues that the Court lacks subject matter jurisdiction. (ECF No. 12-1 at 7-9.) Next, Shell contends that Plaintiff's second claim for the transfer of land should be dismissed because it never owned any portion of the Arsenal. (Id. at 9.) With regard to the first claim, Shell argues that it is not an “operator” of the Arsenal and, therefore, has no obligation to obtain a post-closure permit as Plaintiff alleges. (Id. at 10-18.) Finally, Shell argues that imposing any permit requirement on it conflicts with CERCLA's permit waiver provision. (Id. at 19-20.)

         Federal Defendants separately move to dismiss Plaintiff's complaint on several grounds pursuant to Fed.R.Civ.P. 12(b)(1) and (6). Federal Defendants maintain that both of Plaintiff's claims are barred by the applicable statute of limitations-claim one by Colo. Rev. Stat. § 25-15-308(4)(a) and claim two by 28 U.S.C. § 2401(a)-Federal Defendants argue that Section 2401(a) also poses a jurisdictional bar. (ECF No. 37 at 7-8, 17-19.) As to the first claim, Federal Defendants also insist that the United States (as a whole-distinct from its departments and agencies) is entitled to sovereign immunity and that CERCLA's permit waiver provision bars the claim. (Id. at 8-16.) According to Federal Defendants, claim two must also be dismissed because the United States is entitled to sovereign immunity (together with its departments and agencies) and because CERCLA § 121(e)(2) does not provide for injunctive relief. (Id. at 19-20.)

         Both motions were referred to the magistrate judge. (ECF Nos. 20, 37.) A hearing on the motions was held on December 15, 2017. (ECF No. 39.) Supplemental briefing was filed before the hearing. (ECF Nos. 26, 27.) On March 5, 2018, the magistrate judge issued a Recommendation that each motion be denied in part and granted in part.[1] (ECF No. 42.) Plaintiff, Federal Defendants, and Shell filed objections to the Recommendation. (ECF Nos. 45, 46, 47.)[2]

         The Recommendation advised that the claims, in some permutation of defendants and claims, should go forward. As should always be the case, the parties filed focused objections to some-but not all-findings and conclusions of the magistrate judge. Rather than set forth the magistrate judge's Recommendation as to all matters and how each objection implicates (if at all) the overall recommendations, the Court concludes that the magistrate judge's analysis was thorough and sound, and that there is no clear error on the face of the record with regard to portions of the Recommendation to which neither party objected. See Fed. R. Civ. P. 72(b) advisory committee's note (“When no timely objection is filed, the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.”); see also Summers, 927 F.2d at 1167. And having so said, the Court proceeds directly to the objections.


         A. Does the complaint allege that Shell is an “operator?”

          “Operators” of hazardous waste management units must have permits during the closure period of a unit. 6 Colo. Code Regs. § 1007-3:100.10. The Recommendation concludes that Plaintiff states a cognizable claim against Shell as an operator of the Arsenal because the complaint alleges that Shell “makes decisions regarding funding of the CERCLA remedy and participates in environmental compliance decisions[.]” (ECF No. 42 at 10-13.) Shell's objection contends that the Recommendation erred: (1) by disregarding CHWA's use of the present tense of the word operator; (2) by “failing to engage” with caselaw cited in its brief; and (3) by making “unsupported factual findings regarding Shell's activities at the Arsenal.” (ECF No. 47 at 3-6.) Plaintiff responds that the Recommendation correctly concludes Shell is an operator under controlling law. (ECF No. 49 at 3-4.) The Court agrees with the Recommendation.

         Plaintiff alleges that “Shell makes environmental compliance decisions concerning ongoing funding of the [CERCLA] remedy and participates in decisions regarding the Facility's compliance with environmental regulations.” (ECF No. 1 at ¶ 39.) CHWA's definition of operator does not answer the question at hand: “‘Operator' means the person operating a hazardous waste management facility or site either by contract or permit.” Colo. Rev. Stat. § 25-15-101. The Court finds the analysis of CERCLA's “operator” definition helpful. Just like CHWA's tautological definition, the Supreme Court “rue[d] the uselessness of CERCLA's definition of a facility's ‘operator' as ‘any person . . . operating' the facility[.]” United States v. Bestfoods, 524 U.S. 51, 66 (1998). In an attempt to give the term its ordinary and natural reading, the Bestfoods court defined operator as “someone who directs the workings of, manages, or conducts the affairs of a facility.” Id. “To sharpen the definition for purposes of CERCLA's ...

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