Federal District Court Holds Indian Tribes Not Subject to Liability Under CERCLA

In a case of first impression, U.S. District Court Judge Lonny R. Suko of the Eastern District of Washington recently held that Indian tribes cannot be liable under the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), because they are not listed in the definition of “persons” covered by the statute. Pakootas v. Teck Cominco Metals, Ltd.[1] The decision presents obstacles for the Environmental Protection Agency (“EPA”) and private parties seeking to recover response costs at sites where Tribes are landowners, arrangers, or facility operators. EPA will have to look to other federal environmental laws, including the Clean Water Act and Resource Conservation and Recovery Act (“RCRA”), to address tribal pollution.[2]

Background

The Pakootas v. Teck litigation involves Teck Cominco’s (“Teck”) operation of a lead-zinc smelter located on the Columbia River in Trail, British Columbia (the “Trail Smelter”), approximately ten miles north of the Canada-United States border. EPA and plaintiffs in the Pakootas v. Teck suit alleged that, between 1906 and 1995, Teck arranged for the disposal of hazardous substances into the Columbia River, which flowed downstream into Washington state.[3] Aspects of the case – including the extraterritorial application of CERCLA – have been litigated in this long-running case, which has already gone up to the U.S. Supreme Court and back down again.[4]

In his most recent decision, Judge Suko ruled on a motion to dismiss counterclaims that Teck filed against both the Tribes and the State of Washington (which intervened in the case). Teck sought costs and a declaratory judgment under 42 U.S.C. §§ 9607 and 9613 that: (1) the Tribes are liable under CERCLA as a result of their ownership and operation of mines and lands upon which mines operate and have operated on the Colville Reservation;[5] and (2) the State is liable under CERCLA as a result of the State’s current and historical ownership and operation of state lands upon which mines and abandoned lines are or were located.[6]

The Court’s Order Granting Plaintiffs’ 12(b)(6) Motion to Dismiss

In January 2009, the Tribes moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the counterclaims asserted by Teck. The Tribes argued that Indian tribes are not “persons” under CERCLA’s liability provision, 42 U.S.C. § 9607(a). The Tribes relied on: (1) Congress’ omission of any reference to Indian tribes in its definition of the term “person”;[7] (2) EPA policy indicating that Indian tribes are not subject to CERCLA liability; and (3) Indian law canons of construction supporting a plain language reading of the statute and EPA’s interpretation thereof.[8]

In response, Teck argued that to exempt Indian tribes from liability under CERCLA would:

create a ‘hole’ in CERCLA’s liability net, leaving Indian tribes, unlike all other units of local, state or federal government, free from the obligation to clean up their own contamination. Under the Tribes’ interpretation of CERCLA, an Indian tribe could never, under any circumstances, be found to be a [PRP under CERCLA and, a]s a result, … could literally operate a dump for the disposal of hazardous substances, with complete impunity under CERCLA.[9]

Teck noted that approximately 53 million acres of land in the United States belong to Indian tribes, and argued that the Tribes’ reasoning would also “mean that Indian tribes are free to seek more than their fair share of costs from other parties without being subject to a counterclaim to check the overreaching.”[10]

Teck also argued that: (1) CERCLA should be liberally construed, particularly with respect to PRP liability, to effectuate its broad remedial purpose; (2) CERCLA’s use of the term “municipality” in the definition of “person” should be read in pari materia[11] with other environmental laws, including the Safe Drinking Water Act, Clean Water Act, and Resource and Conservation Recovery Act (“RCRA”), which include Indian Tribes in their definitions of “municipality; (3) EPA policy does not definitively provide that the agency does not view tribes as PRPs, and such policy is not entitled to deference anyway; and (4) canons of construction applicable in Indian law jurisprudence do not apply to statutes of general interpretation such as CERCLA.

Judge Suko, however, agreed with the Tribes, based on a literal reading of the CERCLA statute, and granted the Tribes’ motion.[12] The Court held that CERCLA:

imposes liability upon certain ‘persons’ (i.e., owner/operator, arranger, transporter) for costs incurred in responding to a release of hazardous substances. ‘Person’ is defined in Section 9601(21) as ‘an individual, firm, corporation, association, partnership, consortium, joint venture, commercial entity, United States Government, State, municipality, commission, political subdivision of a State, or any interstate body.’ ‘Indian tribe’ is not expressly included in this list and indeed, is defined separately at Section 9601(36).[13]

While noting that “[t]here may be some very compelling policy reasons why Indian tribes should not be exempt from CERCLA liability, … that is something Congress needs to address, not this [C]ourt.”[14] The Court found that “CERCLA's definition of ‘person’ is plain. It does not include ‘Indian tribes. … Whereas CERCLA specifically provides for liability to an Indian tribe, 42 U.S.C. [§§] 9607(a)(4)(A) and 9607(f), it contains no specific provision for the liability of an Indian tribe.”[15]

The Court rejected Teck’s argument in support of applying the in pari materia canon, finding that: (1) waiver of sovereign immunity requires clearly expressed Congressional intent;[16] and (2) even setting principles of sovereign immunity aside, CERCLA differs sufficiently from other environmental statutes such as the Safe Drinking Water Act, Clean Water Act, and RCRA, such that the in pari materia canon should not apply – particularly where the statutory text illustrates that Congress affirmatively decided to treat an Indian tribe like a municipality under those statutes, and differently from a municipality under CERCLA.

In reaching its holding, the Court acknowledged that other courts have sustained claims against Indian tribes under somewhat similar facts. In those cases, courts held that when a tribe files suit, it waives its immunity as to counterclaims if those claims sound in recoupment.[17] Claims in recoupment arise out of the same transaction or occurrence, seek the same kind of relief as the plaintiff, and do not seek an amount in excess of that sought by the plaintiff.[18] In a recent case applying the doctrine of recoupment, Berrey v. ASARCO Inc., the Tenth Circuit held the defendants’ counterclaims for common law contribution and indemnity against an Indian tribe were not waived because the counterclaims sounded in recoupment.[19] The tribe in that case argued for dismissal of defendants’ CERCLA counterclaims for contribution, arguing that it was not a “person” under CERCLA. The Tenth Circuit held that it lacked jurisdiction over the issue and declined to address it.[20] Judge Suko distinguished the recoupment line of cases because the Tribes in Pakootas v. Teck sought dismissal based on statutory interpretation, not sovereign immunity.[21]

Finally, Judge Suko found no reason to consider EPA’s interpretation of tribal liability under CERCLA because the statute’s plain language illustrates that Indian tribes are not subject to liability under the statute. Under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,[22] if a statute is not silent or ambiguous, a court need not consider or give deference to an administrative agency’s interpretation. For the same reason, the court did not consider Indian law canons of construction, either.

Conclusion

Judge Suko’s opinion creates a unique class of parties who are exempt from CERCLA liability – perhaps the only class of dischargers who have been exempted from this broad environmental law. Both EPA and private parties will therefore have to be creative in finding other laws and theories upon which to seek relief.

For additional information on this opinion, contact Jessica Ferrell or any other member of Marten Law Group’s waste cleanup or environmental litigation practice groups.