ASARCO v. Union Pacific Railroad Company

762 F.3d 744, 44 Envtl. L. Rep. (Envtl. Law Inst.) 20187, 2014 WL 3882500, 79 ERC (BNA) 1526, 2014 U.S. App. LEXIS 15285
CourtCourt of Appeals for the Eighth Circuit
DecidedAugust 8, 2014
Docket13-2830
StatusPublished
Cited by18 cases

This text of 762 F.3d 744 (ASARCO v. Union Pacific Railroad Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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ASARCO v. Union Pacific Railroad Company, 762 F.3d 744, 44 Envtl. L. Rep. (Envtl. Law Inst.) 20187, 2014 WL 3882500, 79 ERC (BNA) 1526, 2014 U.S. App. LEXIS 15285 (8th Cir. 2014).

Opinion

RILEY, Chief Judge.

Two companies with a business relationship dating back to the nineteenth century call upon us to resolve their dispute about environmental liability for a lead refinery and smelter — once among the world’s largest — which polluted Omaha, Nebraska, for over a hundred years. The former American Smelting and Refining Company, today known simply as ASARCO, LLC (As-arco), claims the Union Pacific Railroad Company (UP) has contributed too small a share of the clean-up cost. Asarco paid approximately $200 million to settle with the Environmental Protection Agency (EPA), which named lead-contaminated areas of Omaha a “Superfund” site. UP settled with the EPA for $25 million.

*746 Under the complex statutory structure erected by Congress in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA or Act), 42 U.S.C. §§ 9601-9675, settling with the government protects a party from further liability claims. See id. § 9613(f)(2). Despite receiving notice of UP’s settlement, Asarco did not object before the district court 1 issued the consent decree. Asarco waited until after entry of the consent decree and brought this collateral case. According to Asarco, UP breached the two companies’ agreement to toll the statute of limitations while “reserv[ing] all [other] rights and defenses.” The district court 2 granted UP’s motion to dismiss, ruling UP did not breach the agreement and the consent decree protected UP from Asarco’s claims. Having duly considered Asarco’s assignments of error, we affirm.

I. BACKGROUND

The history of this case is an archetypal tale of industrial boom and environmental bust.

A. The Smelter

About a year after the Golden Spike linked the coasts in 1869, the Omaha Smelting Company began construction on land leased from UP near the eastern terminus of the Transcontinental Railroad. See 1 Omaha: The Gate City and Douglas County Nebraska 226 (Arthur C. Wakeley ed., 1917). Both Omaha and the smelter grew rapidly; within two decades the smelter’s initial capital stock of $60,000 increased to $2.5 million, with over 65,000 tons of ore (then worth $14 million 3 ) smelted in 1890. See Lawrence H. Larsen et al., Upstream Metropolis: An Urban Biography of Omaha & Council Bluffs 118 (2007); Nebraska: A Guide to the Com-husker State 282 (1939). Control of the smelter passed to the American Smelter and Refining Company in 1889, and by the 1920s it “was reputed to be the nation’s largest lead refinery,” “producing refined lead,] copper, gold, and silver,” and employing hundreds of immigrants who “spoke a total of fourteen languages.” Larsen, supra, at 118, 206; see Nebraska, supra, at 232. Amid the Great Depression, the smelter continued to produce 150,000 tons of “desilverized lead” a year, making it “one of the largest smelters in the world.” Nebraska, supra, at 220, 232. In 1958, the smelter still had the largest lead refining capacity in the United States: 180,000 tons per year. See United States v. Am. Smelting & Ref. Co., 182 F.Supp. 834, 851 (S.D.N.Y.1960).

Beneath the smelter’s soaring smokestacks — one of which in 1939 was “said to be the highest self-supported metal stack in existence,” Nebraska, supra, at 232 — lay a darker story. An early twentieth century study of the “chief centers of the [lead] industry,” including Omaha, found the lead poisoning rate for workers in 1912 was “a little over twenty-two for every 100 employed.” Alice Hamilton, Lead Poisoning in American Industry, 1 J. Indus. Hygiene 8, 10 (1919). Approximately sixty *747 years later, we upheld a finding by the Occupational Safety and Health Review Commission “that airborne -concentrations of inorganic lead at” the Omaha smelter seriously threatened the lives and health of employees. Am. Smelting & Ref. Co. v. Occ. Safety & Health Review Comm’n, 501 F.2d 504, 506 (8th Cir.1974). The smelter “historically discharged wastewater containing lead and other pollutants directly into the [Missouri] river” — potentially “several thousand pounds of lead and other heavy metals and pollutants ... annually.” Armstrong v. ASARCO, Inc., 138 F.3d 382, 384 & n. 3 (8th Cir.1998). Not until 1994 — after lawsuits by citizen plaintiffs and the EPA — did Asarco agree to “limitations on the levels of pollutants [the smelter] was permitted to discharge into the river.” Id. at 384-85.

According to the EPA and the State of Nebraska, lead emitted from the smelter also blew downwind and landed in residential areas of Omaha, contaminating soil. Screening in 1997 and 1998 found approximately 21% of children in the area had elevated blood lead levels — -associated with lowered IQ, troubled behavior, impaired hearing, and stunted growth. See Agency for Toxic Substances & Disease Registry, Dep’t of Health & Human Servs., Public Health Assessment for Omaha Lead 11, 15 (2005). Asarco closed the smelter in the late 1990s, paying for remediation and donating the land to the City of Omaha to use as a riverside park. Yet approximately 10% of children in the area still had elevated levels of lead between 2000 and 2002. See id. at 23.

B. Superfund Litigation

In 2003, the EPA designated approximately 27 square miles around the former Asarco smelter as a Superfund site. The EPA took enforcement action against As-arco, alleging liability of $400 million for the cost of removing lead from the affected area. Faced with crushing environmental liabilities for “many of the largest, oldest, and most complex Superfund sites in the country, including the two largest,” Asarco filed for bankruptcy in 2005. In re ASARCO LLC, No. 05-21207, 2011 WL 2974957, at *9 (Bankr.S.D.Tex. July 20, 2011). In 2009, the bankruptcy court approved Asar-co’s approximately $214 million settlement of the EPA’s claims related to the Omaha site.

The EPA also named UP as a potentially responsible party. UP owned the smelter site, leasing it to Asarco until the late 1940s when Asarco bought the land. The Act extends liability to any “owner” of “any site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located,” 42 U.S.C. §§ 9601(9), 9607(a)(1), with the only time limit on recovery beginning to run once “remedial action” begins, id. § 9613(g)(2)(B). “Liability under the statute is generally strict and subject to very narrow defenses.” Stewman v. Mid-S. Wood Prods. of Mena, Inc., 784 F.Supp. 611, 615 (W.D.Ark.1992) (M.S. Arnold, J.).

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762 F.3d 744, 44 Envtl. L. Rep. (Envtl. Law Inst.) 20187, 2014 WL 3882500, 79 ERC (BNA) 1526, 2014 U.S. App. LEXIS 15285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/asarco-v-union-pacific-railroad-company-ca8-2014.