New Mexico v. General Electric Co.

335 F. Supp. 2d 1185
District Court, D. New Mexico·Decided April 6, 2004·No. CIV 99-1118 BSJ/KBM, CIV 99-1254 BSJ/ACT (Consolidated)·Published·Cited by 15 cases

Opinion

MEMORANDUM OPINION & ORDER

JENKINS, Senior District Judge.

TABLE OF CONTENTS

I.FACTUAL BACKGROUND..1192

II.BRIEF STATEMENT OF THE CLAIMS . .1195

III. PROCEDURAL CONTEXT. ...,.1197

IV. ISSUES ADDRESSED AT THE PRETRIAL CONFERENCE.1200

A. The State’s Interest in Groundwater.1200

B. The State’s Interest in the Middle Rio Grande Basin Aquifer.1203

C. The Alleged Injury to the State’s Interest.:.1205

1. The Loss of Drinking Water Services .1205

a. The NMWQCC Regulations ..1205

b. The NMWQCC Regulations and Use of Groundwater .:. ■.1207

c. New Mexico Drinking Water Regulations .1208

d. Reconciling the EIB & NMWQCC Regulations.1208

e. NMAC § 20.7.10.1 & Loss of Drinking Water Services.1210

2. Plaintiffs’ Theory of Injury Revisited.1210

V.THE PLAINTIFFS’ THEORY OF DAMAGES.1212

A. Loss of “Extractive Services” & Loss of Value of in situ Groundwater...:.■..1213

1. Alleged Loss of “Extractive Services”.1213

2. Alleged Loss of Value of in situ Groundwater.1215

3. Different Labels, Same Injury.1216
B. Loss of Drinking Water Services v. Total Loss of All Beneficial Uses.... 1217
C. “Temporary” vs. “Permanent” Injury .1218
D. Summary.1222
VI. THE SCOPE AND LIMITS OF PLAINTIFFS’ STATE LAW CLAIMS.1222
A. The State’s Affected Interests...1223
B. Plaintiffs’ Current Pleadings.1223
C. Extrinsic Limitations on the Available Remedies.1224
1. CERCLA & Plaintiffs’ State Law Claims.1224

a. The CERCLA Savings Clauses.1225

b. Conflict Preemption.1225

2. The Hydrocarbon Remediation Agreements .1227

3. Schwartzman, Settlement and Release of the State’s Claims.1229

4. Avoidable Consequences & Plaintiffs’ Duty to Mitigate Damages.... 1230

D. Intrinsic Limitations on the Available Remedies .1231

*1192 1. Common Law Trespass.1231

a. Schwartzman and Physical Invasion of a Possessory Interest-1231

b. Common-Law Trespass & the State’s Interests in Public Water.1232

c. Trespass, Public Nuisance & Injury to Public Rights.1235

d. Plaintiffs’ Claims re: Injury to the Aquifer.1235

2. Common Law Public Nuisance.1235

a. Remedies for Common Law Public Nuisance .1237

b. Nuisance Damages & the “Special Injury” Requirement.1239

3. Statutory Public Nuisance (N.M. Stat. Ann. § 30-8-2 (Repl. 1994)) .1241

a. Availability of Damages for Statutory Public Nuisance.1242

b. Statutory Public Nuisance, NMED & the Doctrine of

Primary Jurisdiction. 1244

4. Common Law Negligence.1244

a. Essential Elements.1245

b. The Duty Issue. 1245

c. Breach of the Duty of Care...1247

d. Causation in Fact & Proximate Cause .1247

e. Injury in Fact & Damages .1249

5. Summary re: Intrinsic Limitations.1250
E. The Measure of Damages Under New Mexico Law.1251
1. Diminution of Value & Loss of Use.1251
2. Cost of Restoration as a Measure of Damages.1252
3. Plaintiffs’ “Loss of Use” Damages Theory.1253

a. Loss of Use Damages & Replacement Cost .1253

b. Proof of “Loss of Use’VReplacement Cost Damages.1254

c. Alternative Measures & the “License to Pollute”.1255

4. Cost of Restoration v. Replacement Cost.1256

5. Injury and Remedy in Hazardous Waste Cases.1256

6. The State as Public Trust ee/Parens Patriae.1257

7. Cost of Restoration & the Constraints on Plaintiffs’ Claims.1258

F. The Measure of Damages in This Case. 1259
VII. SCOPE OF THE TRIAL ON INJURY AND DAMAGES 1 — ( CD (M r — t

A. Summary Judgment & Genuine Issues for Trial .. y — I N r — I

B. Genuine Issues Remaining for Trial. C\I ZD W t-H

VIII. RULINGS ON PENDING MOTIONS .1263
XI. FINAL PRETRIAL CONFERENCE. .1265

I.FACTUAL BACKGROUND

Abuquerque’s South Valley is located about 2.5 miles south of downtown Abu-querque, west of the Abuquerque International Airport around the intersections of Woodward Avenue with Broadway Avenue and Edmunds Street. The South Valley area has been the site of manufacturing operations since at least 1948, when the Eidal Manufacturing Company operated a welding plant on Broadway Avenue. In 1951, the Atomic Energy Commission, through American Car and Foundry (“ACF Industries”), took over the property, constructed plant facilities and engaged in machining of metal parts, plating, welding and other activities related to the manufacture of nuclear weapons components. This continued until 1967, when the United States Ar Force (USAF) assumed control over the property and converted the facility into an aircraft engine parts manufacturing plant, known as U.S. Air Force Plant 83 (“Plant 83.”), operated by General Electric Company under a series of facilities contracts and leases. In 1984, Plant *1193 83 was sold to General Electric Aircraft Engines (GEAE) and remains in operation today as an aircraft engine parts manufacturing facility. Other industrial facilities have been located in South Valley as well, including petroleum product pipeline and bulk distribution facilities operated by Chevron, Texaco and others, and an industrial chemical distribution facility on Ed-munds Street owned and operated by Uni-var.

In 1979, chemical analysis of samples collected from one of the City of Albuquerque’s municipal water supply wells, the San Jose 6 Well (“SJ-6”), 1

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New Mexico v. General Electric Co., 335 F. Supp. 2d 1185 (D.N.M. 2004).

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