United States v. Sterling Centrecorp Inc.

209 F. Supp. 3d 1151, 2016 WL 5159397, 83 ERC (BNA) 1345, 2016 U.S. Dist. LEXIS 128371
CourtDistrict Court, E.D. California
DecidedSeptember 20, 2016
DocketNo. 2:08-cv-02556-MCE-JFM
StatusPublished

This text of 209 F. Supp. 3d 1151 (United States v. Sterling Centrecorp Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Sterling Centrecorp Inc., 209 F. Supp. 3d 1151, 2016 WL 5159397, 83 ERC (BNA) 1345, 2016 U.S. Dist. LEXIS 128371 (E.D. Cal. 2016).

Opinion

MEMORANDUM AND ORDER

MORRISON C. ENGLAND, JR., UNITED STATES DISTRICT JUDGE

Both the United States and the California Department of Toxic Substances (hereinafter collectively referred to as “Plaintiffs” or “government” unless otherwise [1153]*1153specified) have designated the former Lava Cap Mine, located in Nevada County, California, as a Superfund site polluted by elevated levels of arsenic that were disseminated through tailings and waste materials generated by mine operations. Plaintiffs have undertaken cleanup efforts designed to remediate that arsenic contamination. The present action, filed pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq. (“CERCLA”), seeks contribution for the costs of those activities both from former owners of the site and operators responsible for its mining. After bifurcating the case between liability and damages, a bench trial as to the liability of Defendant Sterling Centrecorp Inc. (“Sterling”) was held over four days between October 31, 2012, and November 7, 2012. Those proceedings resulted in Findings of Fact and Conclusions of Law filed June 20, 2013, and June 24, 2013, that found Sterling liable for all proper removal and remedial costs incurred by Plaintiffs at the Mine. ECF Nos. 211, 213.1

Presently before the Court are two related motions for summary judgment pertaining to the second damages phase of this case. First, Defendant Sterling Cen-trecorp Inc. (“Sterling”) moves for partial summary judgment as to the issue of operator liability, alleging that the government was an operator of the Lava Cap Mine Superfund Site after it issued, in 1943, an order closing the Mine during World War II pursuant to War Production Board Limitation Order L-208 (“Order L-208”). The government, in turn, has filed its own request for summary judgment as to Sterling’s Counterclaim2 that the government is liable to pay a portion of the response costs incurred in the Lava Cap Mine Superfund Site because it temporarily prohibited, through Order L-208, the mine from operating during the 1940’s so that national resources could be concentrated in industries that produced materials, like copper and zinc, that were necessary for the war effort. For the reasons set forth above, the Court finds that the government was not an “operator” of the Lava Cap Mine for CERCLA purposes because it closed the facility in accordance with Order L-208. Consequently, the government’s motion for summary judgment will be granted, and Sterling’s motion is denied.3

BACKGROUND

The Lava Cap Mine Superfund Site is located on approximately thirty acres located in a rural residential area in the foothills of the Sierra Nevada Mountains. Gold and silver mining activities at the site began in approximately 1860. Between 1943 and 1945 mining was conducted at the site by the Lava Cap Gold Mining Corporation (“LCGMC”). Mining operations resulted in two piles of mining waste, a waste rock pile and a mill tailings pile. Findings of Fact ¶¶ 34-35.4 The waste rock pile, estimated to be several stories high, was situated immediately next to the mine [1154]*1154and mill building. Id. at ¶ 34. The fine-grained materials comprising the mill tail-ings were impounded downstream from the mill behind a timber dam on Little Clipper Creek. Id. at ¶¶ 12, 35. In 1938, LCGMC created another dam on Greenhorn Creek to also trap mill tailings, thereby creating Lost Lake. Id. at ¶ 13.

In 1941, shortly after World War II began, the government took steps to address a shortage of nonferrous metals along with the machines and supplies necessary to produce those metals. On January 16, 1942, President Roosevelt established the War Production Board, an entity tasked with the conversion of civilian industry to wartime production. The Board proceeded to issue a series of orders giving priority to copper mining. Gold mines were classified as nonessential and given the lowest priority rating. See United States v. Central Eureka Mining Co., 357 U.S. 155, 157, 78 S.Ct. 1097, 2 L.Ed.2d 1228 (1958).

On October 8, 1942, the Board issued Order L-208, which, after a seven-day notice period, prohibited owners of non-essential mines from any action to “acquire, consume, or use any material, facility, or equipment to break any new ore or to proceed with any development work or any new operations in or about such mine.” Plaintiffs’ Statement of Undisputed Fact (“PUF”) No. 1. Order L-208 went on preclude owners of non-essential mines from removing, after sixty days, “any ore or waste from such mine, either above or below ground, or [from] conducting] any other operations in or about such mine, except to the minimum amount necessary to maintain its buildings, machinery, and equipment in repair, and its access and development workings safe and accessible.” Id. at No. 2.

Although the Board did not originally invoke the provisions of Order L-208 and allowed operations at the Lava Cap Mine to continue, on May 12, 1943, the Board advised LCGMC that as of June 1, 1943, it would be subject to the requirements of the Order. Id. at Nos. 4-5. By July of 1943, LGMC had ceased extracting ore that had already broken down and had removed mine equipment. Id. at 7-8.

A little over two years later, on June 30, 1945, the Board revoked Order L-208 and thereby permitted the resumption of gold mining activities at mines that had previously been designated non-essential. Id. at No. 9. LCGMC nonetheless did not resume operations at the Lava Cap Mine, and in September of 1952, Defendant Sterling’s predecessor, New Goldvue Mines, Inc.,5 signed an agreement to acquire LCGMC’s assets, including the Lava Cap Mine, through its wholly owned subsidiary, Keystone Copper Corporation.6 Findings of Fact ¶¶ 24-27. Sterling therefore became LCGMC’s successor by de facto merger (Conclusions of Law ¶¶ 6, 58),7 and took no action at the mine site for decades.

In 1979, a partial log dam collapse led to a release of mine tailings into Little Clipper Creek which, in turn, caused downstream neighbors to complain about pollution from the resulting silt. Findings of Fact ¶¶ 142-43, 166. In October of 1979, the Central Valley Regional Control Board and the California Department of Fish and Game investigated and found that arsenic [1155]*1155contaminated tailings had entered Little Clipper Creek and flowed downstream to Lost Lake. Id. at ¶ 142-43, 21. The Regional Water Quality Control Board thereafter issued a Cleanup and Abatement Order to Keystone, which technically held title to the mine at the time, on October 25,1979. Id. at ¶ 144.

Following an ultimately unsuccessful attempt to sell the Lava Cap Mine to another company, Keystone sold the property to Banner Mountain Properties, Ltd., an entity controlled by Defendant Stephen Elder, who currently owns four of the seven parcels comprising the former mine site, in 1989. The remaining three parcels are owned by another Elder business interest, Defendant Elder Development, Inc.

The United States Environmental Protection Agency (“EPA”) completed a Preliminary Assessment on the mine site in April of 1993, after Elder’s purchase of the mine site.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Improvement Company v. Munson
81 U.S. 442 (Supreme Court, 1872)
United States v. Central Eureka Mining Co.
357 U.S. 155 (Supreme Court, 1958)
First Nat. Bank of Ariz. v. Cities Service Co.
391 U.S. 253 (Supreme Court, 1968)
Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
United States v. Bestfoods
524 U.S. 51 (Supreme Court, 1998)
Redevelopment Agency of City of Stockton v. BNSF
643 F.3d 668 (Ninth Circuit, 2011)
Richards v. Nielsen Freight Lines
602 F. Supp. 1224 (E.D. California, 1985)
United States v. Iron Mountain Mines, Inc.
987 F. Supp. 1277 (E.D. California, 1997)
Allstate Insurance v. Madan
889 F. Supp. 374 (C.D. California, 1995)
United States v. Iron Mountain Mines, Inc.
881 F. Supp. 1432 (E.D. California, 1995)

Cite This Page — Counsel Stack

Bluebook (online)
209 F. Supp. 3d 1151, 2016 WL 5159397, 83 ERC (BNA) 1345, 2016 U.S. Dist. LEXIS 128371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-sterling-centrecorp-inc-caed-2016.