1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 State of Arizona, No. CV-25-00059-TUC-SHR
10 Plaintiff, Order Entering Consent Decree
11 v.
12 Tucson Electric Power Company,
13 Defendant. 14 15 16 Pending before the Court is the State of Arizona’s Motion to Enter Consent Decree 17 (Doc. 5). For the following reasons, the Court grants the Motion and enters the Consent 18 Decree. 19 I. Background 20 The State of Arizona brought this action against Tucson Electric Power Company 21 (“TEP”), a potentially responsible party (“PRP”), to recover remedial costs the State has 22 incurred and will incur from its cleanup of hazardous substances located on or originating 23 from the Broadway Pantano landfill (“Site”) located in Tucson, Arizona. (See generally 24 Doc. 1.) Defendant TEP is the successor in interest for Tucson Gas & Electric Company 25 which owned portions of the Site when hazardous waste was deposited at that location. 26 (Id. ¶ 12.) The State of Arizona sought relief under the Comprehensive Environmental 27 Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601, et seq. and 28 the Water Quality Assurance Revolving Fund (“WQARF”) program, A.R.S. § 49-281, et 1 seq. (See Doc. 1 ¶¶ 29–42; see also Doc. 5 at 2.) 2 Soon after filing the complaint, on March 13, 2025, the State filed its Notice of 3 Settlement, which contained an unsigned consent judgment which would be subject to the 4 Court’s approval after a public notice and comment period under Arizona law. (See Doc. 5 4 at 1.) During the public notice and comment period, no public comments were 6 received. (Doc. 5 at 10). Therefore, on April 28, 2025, the State filed the instant Motion 7 to Enter the Consent Decree. (See id.). Under the Consent Decree, Defendant TEP has 8 agreed to pay Plaintiff $90,713.08 to resolve the claims. (Doc. 5-1 at 85.) 9 II. Standard 10 In determining whether to approve a consent decree under CERCLA, a court must 11 determine whether the proposed settlement is procedurally fair, substantively fair, 12 reasonable, and consistent with the purpose of CERCLA. State of Arizona v. Nucor Corp., 13 825 F. Supp. 1452, 1456 (D. Ariz. 1992), aff’d on other grounds, 66 F.3d 213 (9th Cir. 14 1995); United States v. Montrose Chem. Corp. of Cal., 50 F.3d 741, 747 (9th Cir. 1995). 15 When performing its review, a court need not determine whether the settlement is the best 16 possible settlement available. City of Colton v. Am. Promotional Events, Inc., 281 F. Supp. 17 3d 1009, 1012 (C.D. Cal. 2017). 18 III. Discussion 19 To determine procedural fairness, courts “must look to the negotiation process and 20 ‘attempt to gauge its candor, openness, and bargaining balance.’” Nucor, 825 F. Supp. at 21 1456 (quoting U.S. v. Cannons Eng’g Corp., 899 F.2d 79, 86 (1st Cir. 1990)). In the 22 Motion, the parties state the “Consent Decree filed in this matter is the product of an arms- 23 length negotiated settlement between the Parties.” (Doc. 5 at 2). Moreover, the Consent 24 Decree itself supports this assertion because it shows TEP was represented by independent 25 counsel in these negotiations. (See id. at 95.) The Consent Decree also avers “the Parties 26 agree that settlement of this matter and entry of this Consent Decree is made in good faith 27 and in an effort to avoid further expenses of protracted litigation.” (Id. at 81.) The Consent 28 Decree was also publicly filed before it was finalized and subject to notice and comment. 1 Therefore, the Court finds the settlement agreement was the result of procedural fairness. 2 Substantive fairness “concerns the issues of corrective justice and accountability.” 3 Nucor, 825 F. Supp. at 1458. An agreement can be substantively fair so long as a party 4 “bear[s] the cost of the harm for which it is legally responsible.” Cannons, 899 F.2d at 87. 5 Moreover, in determining the reasonableness of CERCLA settlements, courts will consider 6 the “efficacy of the settlement in compensating the public for actual and anticipated 7 remedial and response costs and the relative strength of the parties’ litigating 8 positions.” Nucor, 825 F. Supp. at 1464. As part of this analysis, courts examine whether 9 the settlement amount is proportional to the settling defendant’s share of responsibility for 10 the environmental damage. Montrose, 50 F.3d at 747; Cannons, 899 F.2d at 87. 11 The Court finds the Consent Decree is substantively fair and reasonable. The 12 Arizona Department of Environmental Quality (“ADEQ”) allocated liability for the 13 hazardous waste remediation at the Site by incorporating “generally accepted allocation 14 methodologies, which the U.S. Environmental Protection Agency (“EPA”) has also 15 adopted.” (Doc. 5 at 4.) ADEQ established the following formula to allocate an individual 16 PRP’s cost by calculating the number of acres owned by the time they owned those acres, 17 eventually arriving at 4.13% for TEP using this approach. (Id. at 9.) Next, an owner-PRP’s 18 overall cost allocation was calculated by multiplying the group percentage (7% for owners) 19 by the individual PRP subgroup percentage (4.13% for TEP) then by the total estimated 20 cost of remedial measures. (Id. at 8–9; Doc. 5-1 at 3.) 21 Although it appears TEP’s settlement amount is based on an amount higher than the 22 total remedial action cost stated in the Motion, this discrepancy does not disturb the Court’s 23 finding because information within the supporting documents reinforces the finding and it 24 remains proportional. In the State of Arizona’s Motion, it notes “ADEQ arrived at an 25 estimated total remedial action cost of $25,236,012 for the Site.” (Doc. 5 at 4 (emphasis 26 added) (citing Attachment 3); see also Doc. 5-1 at 9 (Attachment 3).) Many estimates of 27 recovery costs were included in the supporting materials for the Motion to Enter, none of 28 which appear to align with the $25,236,012 figure purportedly from Attachment 3. (See, 1 e.g., Doc. 5-1 at 3 ($28,290,350); id. at 9 ($29,659,308); id. at 5, 54 ($28,290,300).) 2 According to the cost allocation methodology in the previous paragraph, TEP’s share is 3 .002891 or .2891% (4.13% X 7%) which would mean the settlement amount of $90,713.08 4 is based on a total remediation cost estimate of $31,377,751.64. 5 The State does not explain this discrepancy in its Motion, but the Court finds this 6 settlement amount reasonable based upon its independent review of the record and the 7 scientific and economic analyses therein. For example, the cost estimates within the record 8 were calculated years ago, mainly in 2019, and explicitly anticipate rising costs over time, 9 for example, noting a standard 3% inflation assumption. (See Doc. 5-1 at 54.) The record 10 also alluded to a higher amount, $43,374,432.14, as an amount eligible for ADEQ to 11 recover pending certain approvals, which shows ADEQ anticipated remedial costs to 12 develop in the future above its 2019 estimates. (Id. at 5.) To the extent the settlement 13 amount was based on an increased amount of projected costs associated with hazardous 14 waste cleanup, the Court also affords some deference to ADEQ’s judgment on the costs of 15 cleanup. See Arizona v. City of Tucson, 761 F.3d 1005, 1014 (9th Cir. 2014) (“[I]if the 16 district court finds that the ADEQ has expertise concerning the cleanup of the Site, it may 17 afford ‘some deference’ to the ADEQ’s judgment concerning the environmental issues 18 underlying the CERCLA consent decrees at issue in this case.”).
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 State of Arizona, No. CV-25-00059-TUC-SHR
10 Plaintiff, Order Entering Consent Decree
11 v.
12 Tucson Electric Power Company,
13 Defendant. 14 15 16 Pending before the Court is the State of Arizona’s Motion to Enter Consent Decree 17 (Doc. 5). For the following reasons, the Court grants the Motion and enters the Consent 18 Decree. 19 I. Background 20 The State of Arizona brought this action against Tucson Electric Power Company 21 (“TEP”), a potentially responsible party (“PRP”), to recover remedial costs the State has 22 incurred and will incur from its cleanup of hazardous substances located on or originating 23 from the Broadway Pantano landfill (“Site”) located in Tucson, Arizona. (See generally 24 Doc. 1.) Defendant TEP is the successor in interest for Tucson Gas & Electric Company 25 which owned portions of the Site when hazardous waste was deposited at that location. 26 (Id. ¶ 12.) The State of Arizona sought relief under the Comprehensive Environmental 27 Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601, et seq. and 28 the Water Quality Assurance Revolving Fund (“WQARF”) program, A.R.S. § 49-281, et 1 seq. (See Doc. 1 ¶¶ 29–42; see also Doc. 5 at 2.) 2 Soon after filing the complaint, on March 13, 2025, the State filed its Notice of 3 Settlement, which contained an unsigned consent judgment which would be subject to the 4 Court’s approval after a public notice and comment period under Arizona law. (See Doc. 5 4 at 1.) During the public notice and comment period, no public comments were 6 received. (Doc. 5 at 10). Therefore, on April 28, 2025, the State filed the instant Motion 7 to Enter the Consent Decree. (See id.). Under the Consent Decree, Defendant TEP has 8 agreed to pay Plaintiff $90,713.08 to resolve the claims. (Doc. 5-1 at 85.) 9 II. Standard 10 In determining whether to approve a consent decree under CERCLA, a court must 11 determine whether the proposed settlement is procedurally fair, substantively fair, 12 reasonable, and consistent with the purpose of CERCLA. State of Arizona v. Nucor Corp., 13 825 F. Supp. 1452, 1456 (D. Ariz. 1992), aff’d on other grounds, 66 F.3d 213 (9th Cir. 14 1995); United States v. Montrose Chem. Corp. of Cal., 50 F.3d 741, 747 (9th Cir. 1995). 15 When performing its review, a court need not determine whether the settlement is the best 16 possible settlement available. City of Colton v. Am. Promotional Events, Inc., 281 F. Supp. 17 3d 1009, 1012 (C.D. Cal. 2017). 18 III. Discussion 19 To determine procedural fairness, courts “must look to the negotiation process and 20 ‘attempt to gauge its candor, openness, and bargaining balance.’” Nucor, 825 F. Supp. at 21 1456 (quoting U.S. v. Cannons Eng’g Corp., 899 F.2d 79, 86 (1st Cir. 1990)). In the 22 Motion, the parties state the “Consent Decree filed in this matter is the product of an arms- 23 length negotiated settlement between the Parties.” (Doc. 5 at 2). Moreover, the Consent 24 Decree itself supports this assertion because it shows TEP was represented by independent 25 counsel in these negotiations. (See id. at 95.) The Consent Decree also avers “the Parties 26 agree that settlement of this matter and entry of this Consent Decree is made in good faith 27 and in an effort to avoid further expenses of protracted litigation.” (Id. at 81.) The Consent 28 Decree was also publicly filed before it was finalized and subject to notice and comment. 1 Therefore, the Court finds the settlement agreement was the result of procedural fairness. 2 Substantive fairness “concerns the issues of corrective justice and accountability.” 3 Nucor, 825 F. Supp. at 1458. An agreement can be substantively fair so long as a party 4 “bear[s] the cost of the harm for which it is legally responsible.” Cannons, 899 F.2d at 87. 5 Moreover, in determining the reasonableness of CERCLA settlements, courts will consider 6 the “efficacy of the settlement in compensating the public for actual and anticipated 7 remedial and response costs and the relative strength of the parties’ litigating 8 positions.” Nucor, 825 F. Supp. at 1464. As part of this analysis, courts examine whether 9 the settlement amount is proportional to the settling defendant’s share of responsibility for 10 the environmental damage. Montrose, 50 F.3d at 747; Cannons, 899 F.2d at 87. 11 The Court finds the Consent Decree is substantively fair and reasonable. The 12 Arizona Department of Environmental Quality (“ADEQ”) allocated liability for the 13 hazardous waste remediation at the Site by incorporating “generally accepted allocation 14 methodologies, which the U.S. Environmental Protection Agency (“EPA”) has also 15 adopted.” (Doc. 5 at 4.) ADEQ established the following formula to allocate an individual 16 PRP’s cost by calculating the number of acres owned by the time they owned those acres, 17 eventually arriving at 4.13% for TEP using this approach. (Id. at 9.) Next, an owner-PRP’s 18 overall cost allocation was calculated by multiplying the group percentage (7% for owners) 19 by the individual PRP subgroup percentage (4.13% for TEP) then by the total estimated 20 cost of remedial measures. (Id. at 8–9; Doc. 5-1 at 3.) 21 Although it appears TEP’s settlement amount is based on an amount higher than the 22 total remedial action cost stated in the Motion, this discrepancy does not disturb the Court’s 23 finding because information within the supporting documents reinforces the finding and it 24 remains proportional. In the State of Arizona’s Motion, it notes “ADEQ arrived at an 25 estimated total remedial action cost of $25,236,012 for the Site.” (Doc. 5 at 4 (emphasis 26 added) (citing Attachment 3); see also Doc. 5-1 at 9 (Attachment 3).) Many estimates of 27 recovery costs were included in the supporting materials for the Motion to Enter, none of 28 which appear to align with the $25,236,012 figure purportedly from Attachment 3. (See, 1 e.g., Doc. 5-1 at 3 ($28,290,350); id. at 9 ($29,659,308); id. at 5, 54 ($28,290,300).) 2 According to the cost allocation methodology in the previous paragraph, TEP’s share is 3 .002891 or .2891% (4.13% X 7%) which would mean the settlement amount of $90,713.08 4 is based on a total remediation cost estimate of $31,377,751.64. 5 The State does not explain this discrepancy in its Motion, but the Court finds this 6 settlement amount reasonable based upon its independent review of the record and the 7 scientific and economic analyses therein. For example, the cost estimates within the record 8 were calculated years ago, mainly in 2019, and explicitly anticipate rising costs over time, 9 for example, noting a standard 3% inflation assumption. (See Doc. 5-1 at 54.) The record 10 also alluded to a higher amount, $43,374,432.14, as an amount eligible for ADEQ to 11 recover pending certain approvals, which shows ADEQ anticipated remedial costs to 12 develop in the future above its 2019 estimates. (Id. at 5.) To the extent the settlement 13 amount was based on an increased amount of projected costs associated with hazardous 14 waste cleanup, the Court also affords some deference to ADEQ’s judgment on the costs of 15 cleanup. See Arizona v. City of Tucson, 761 F.3d 1005, 1014 (9th Cir. 2014) (“[I]if the 16 district court finds that the ADEQ has expertise concerning the cleanup of the Site, it may 17 afford ‘some deference’ to the ADEQ’s judgment concerning the environmental issues 18 underlying the CERCLA consent decrees at issue in this case.”). Therefore, because the 19 methodology was sound and the passage of time appeared to necessitate a higher estimate, 20 this figure is substantively fair and reasonable. 21 Finally, the primary goals of CERCLA are to encourage early settlements and to 22 ensure accountability from those responsible for any abandoned waste. See Montrose at 23 745–56. This helps further the goal of ensuring prompt site cleanups. Nucor, 825 F. Supp. 24 at 1464. The parties’ settlement agreement aligns with and furthers these goals. This 25 settlement will streamline future litigation, if any, by removing a defendant from the case 26 and will quickly transfer money into the cleanup fund. Further, it holds Defendant TEP 27 accountable for its predecessor’s precise contribution to the hazardous waste at the Site. 28 Therefore, the Court will approve the proposed settlement because it furthers these two goals of CERCLA. IV. Conclusion 3 Because the Consent Decree is substantively and procedurally fair, reasonable, and consistent with CERCLA’s goals, the Court will grant the Motion to Enter. 5 Accordingly, 6 IT IS ORDERED the Motion (Doc. 5) is GRANTED. The Court approves || the Consent Decree (Doc. 5-1 at 78-97) and contemporaneously signs the Consent Decree. 8 IT IS FURTHER ORDERED the Clerk of the Court shall docket in a separate entry the Consent Decree (Doc. 5-1 at 78-97) containing the Court's signature. 10 IT IS FURTHER ORDERED the Clerk of the Court shall enter judgment 11 || accordingly and close this case. 12 Dated this 2nd day of June, 2025. 13 14 /) Aa: hel 16 Honorable Scott H. Rash _/ United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28
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