ASARCO LLC v. CEMEX, Inc.

21 F.Supp.3d 784

ASARCO LLC, a Delaware corporation, Plaintiff

v.CEMEX, INC., a Louisiana corporation, and Cemex Construction Materials South, LLC, a Delaware Limited Liability Company, Defendants.

No. EP–12–CV–155–PRM.

United States District Court, W.D. Texas, El Paso Division.

Signed March 31, 2014.

Gregory Evans, James G. Warren, Laura G. Brys, Tanya Guerrero, William R. Pletcher, Integar Law Corporation, Los Angeles, CA, Nicole Jennifer Anchondo, David S. Jeans, Ray, Valdez, McChristian & Jeans, PC, El Paso, TX, for Plaintiff.

David Moises Mirazo, Andres Eduardo Almanzan, Mounce, Green, Myers, Safi, Paxson & Galatzan, Steven Lee Hughes, Attorney at Law, El Paso, TX, Walter D. James, III, Walter D. James, III, PLLC, Colleyville, TX, for Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

PHILIP R. MARTINEZ, District Judge.

On this day, the Court considered the testimony and evidence presented by Plaintiff ASARCO LLC and Defendants CEMEX, Inc. and CEMEX Construction Materials South, LLC at a trial conducted before the Court from July 26 to August 1, 2013, in the above-captioned cause. The issue before the Court at trial was Plaintiff's claim for contribution pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and the Superfund Amendments and Reauthorization Act. After careful consideration of the testimony and evidence, the Court makes the following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).¹

I. FINDINGS OF FACT²

A. Background Facts

1. The USIBWC Site

The United States International Boundary and Water Commission (“USIBWC”) oversees the administration of various treaties between the United States and Mexico, specifically those dealing with water distribution and flood control. Trial Tr. vol. I, at 159, July 26, 2013. At its site in El Paso (the “USIBWC Site”), the USIBWC oversees the diversion of water from the Rio Grande River to the American Canal (the “Canal”), a two-mile canal that the United States uses to remove its agreed-upon allotment of water from the river. Parties' Stip. Facts ¶ 34, July 25, 2013, ECF No. 169.

The USIBWC Site, which is located at 2616 W. Paisano Drive, comprises 5.8 acres that include the area surrounding the Dam and Canal as well as the American Dam Field Office Property. Parties' Stip. Facts ¶¶ 1, 33.³ In 2002, during preparations to repair the Canal, the USIBWC discovered that the groundwater and soil around the Canal were contaminated with impermissibly high levels of heavy metals, particularly lead and arsenic. Id. ¶¶ 35–36; see also Pl.'s Ex. 187; Trial Tr. vol. I, at 176. In the soil around the Canal, arsenic was detected at concentrations up to 597 milligrams per kilogram (“mg/kg”), well above the EPA industrial screening level of 2 mg/kg. Pl.'s Ex. 9, ¶ 190; Pl.'s Ex. 187, at P–187–3 tbl. 2–2. Lead was detected at concentrations up to 3500 mg/kg, again well above the industrial screening level of 2000 mg/kg. Pl.'s Ex. 9, ¶ 190; Pl.'s Ex. 187, at P–187–3 tbl.2–2. In the groundwater around the Canal, arsenic levels ranged from 0.07 milligrams per liter (“mg/L”) to 1.84 mg/L, all above the EPA's maximum concentration limit of 0.01 mg/L. Pl.'s Ex. 9, ¶ 190; Pl.'s Ex. 187, at P–187–4 tbl.2–3. Lead levels in the groundwater ranged from 0.6 mg/L to 0.51 mg/L, above the EPA action level of 0.015 mg/L. Pl.'s Ex. 9, ¶ 190; Pl.'s Ex. 187, at P–187–4 tbl.2–3. The USIBWC concluded that the high levels of contaminants found on its Site were the result of Asarco's historic smelting operations, located immediately adjacent to the USIBWC Site. Pl.'s Ex. 9, ¶ 190.

2. USIBWC Settlement with Asarco

Plaintiff ASARCO, LLC (“Asarco”) is a limited liability company organized under the laws of the state of Delaware. Parties' Stip. Facts ¶ 2. From 1887 to 1999, Asarco operated various metal-smelting plants at its site in El Paso (the “Former Asarco Site”), which is located just east of the USIBWC Site. Defs.' Ex. 51 § 2.1–.2; see id. fig. 2–1. In 2005, Asarco declared Chapter 11 bankruptcy in the Southern District of Texas. Id. § 2.2. During bankruptcy proceedings, the United States (the “Government”) filed a proof of claim on behalf of the USIBWC to resolve Asarco's joint-and-several CERCLA liability for “[r]esponse costs [that] have been and will be incurred by EPA at [the USIBWC Site] not inconsistent with the National Contingency Plan.” Pl.'s Ex. 9, ¶ 1; see id. ¶ 194. In a settlement agreement approved by both the bankruptcy court and the district court, Asarco agreed to settle the claim—originally for twenty-seven million dollars—for nineteen million dollars. Parties' Stip. Facts ¶¶ 26–32. Asarco eventually paid the Government over twenty-two million dollars to resolve its liabilities in full, including interest. Id. ¶ 31; Trial Tr. vol. I, at 34; see Defs.' Ex. 31, at 9–10.

Remediation of the USIBWC Site has not yet occurred, nor have bids been issued for the work. Trial Tr. vol. I, at 184. It is thus unclear whether Asarco's settlement amount will be sufficient to pay for full remediation of the Site. The testimony of Gilbert Anaya, the supervisor of the USIBWC's Environmental Management Division, was not clear on this point: while he first stated that he did not know whether the funds from Asarco would pay for one hundred percent of the remediation of the Canal and Dam, id. at 179, he later stated that they would be enough, id. at 182. The Court thus determines that it does not have sufficient evidence to make a conclusive finding of fact on this issue.

3. CEMEX

Defendant CEMEX, Inc. is a Louisiana corporation; Defendant CEMEX Construction Materials South, LLC (“CEMEX Construction”) is a limited liability company organized under the laws of the state of Delaware.⁴ Parties' Stip. Facts ¶¶ 4, 19. CEMEX, Inc. is a successor in interest to Southwestern Portland Cement Company (“SWPCC”). Id. ¶ 6. SWPCC built and operated a cement plant (the “Plant”) in El Paso from 1910 to 1985 and owned the property on which the Plant sits until 1991, when it merged into Southdown, Inc. (“Southdown”). Id. ¶¶ 7–10. Southdown sold the Plant to Industrial Trading, Inc. in 1998. Pl.'s Ex. 195. Three years later, in 2001, Southdown changed its name to CEMEX, Inc. Parties' Stip. Facts ¶ 5; Defs.' Proposed Findings Fact & Conclusions Law ¶ 5, Aug. 30, 2013, ECF No. 208 [hereinafter “Defs.' Proposed Findings & Conclusions”].

SWPCC also owned and operated a limestone quarry called the Toro Quarry (the “Quarry”) until 1986. Parties' Stip. Facts ¶¶ 7, 11. The Quarry was later purchased by Jobe Concrete Products, Inc. (“JCPI”), which mined sand and gravel and operated ready-mix concrete batch operations on the property. Id. ¶¶ 12–13. Additionally, JCPI leased a portion of the Plant property from 1994 to 1996. Trial. Tr. vol. II, at 11. CEMEX Construction is a successor in interest to JCPI and currently operates a ready-mix concrete batch plant at the Quarry. Parties' Stip. Facts ¶¶ 20–21; see id. ¶¶ 14–18.

Both the Quarry and the Plant, collectively known as the “CEMEX Site,” are located approximately a quarter mile from the northern boundary of the USIBWC Site, to the east of the Rio Grande and immediately north of Asarco's property.

Asarco alleges that operations at the CEMEX Site contributed arsenic to the contamination at the USIBWC Site, and thus that CEMEX is responsible for a portion of the settlement amount paid by Asarco to the Government. First Am. Compl. ¶ 14, Mar. 22, 2013, ECF No. 50. Specifically, Asarco brings this CERCLA contribution claim against CEMEX for eleven million dollars, which it alleges constitutes CEMEX's share of the cleanup costs at the USIBWC Site. Pl.'s Post–Trial Br. Supp. Damages & Allocation 28, Aug. 30, 2013, ECF No. 207.

B. Contamination

1. Contamination at the CEMEX Site

a. The Quarry

CEMEX and its predecessors in interest, including SWPCC and JCPI, have quarried limestone at the Quarry since approximately 1910. Trial Tr. vol. III, at 64 (testimony of Kimberly Dennis). The parties agree that limestone contains arsenic, e.g., id. at 84, and CEMEX's designated representative, Kimberly Dennis, acknowledged that the Quarry contains both lead and arsenic, id. In addition, CEMEX concedes that the quarrying process and related activities, such as transportation, can result in fugitive emissions that contain arsenic. Id. at 82–83; Trial Tr. vol. V, at 111–12 (testimony of Dr. Theresa Bowers); see also Pl.'s Ex. 55, at P–55–4 (“The rock crusher facility onsite currently has a notice of violation for fugitive dust emissions.”).

The parties' disputes with respect to the Quarry center on two issues of fact: (1) whether emissions from the Quarry contain an appreciable amount of arsenic, such that the emissions could have contributed to the contamination at the USIBWC Site, and (2) whether water—either surface or ground—flows from the Quarry to the USIBWC Site, such that it may have transported contaminants to the Site.

Several environmental assessments conducted at the Quarry note various materials that may have been dumped on the site, including piles of dust, some of which may be cement kiln dust (“CKD”).⁵ For example, a 1992 Phase I Environmental Assessment of the Quarry performed by Raba–Kistner Consultants, Inc. (“Raba–Kistner”) for JCPI noted the presence of approximately 1000 cubic yards of “[a] light yellow, powdery material which appeared to be cement kiln dust” in an arroyo at the Quarry. Pl.'s Ex. 36, at P–36–10. Similarly, a 1989 environmental assessment of the Quarry, also performed by Raba–Kistner, identified “several piles of material ... which appear[ed] to be kiln dust, along with an unidentified black ash and an unidentified black asphaltic type material” located in the Quarry. Pl.'s Ex. 55, at P–55–5. Each report notes that runoff from kiln dust “can be hazardous due to its high alkalinity.” Id.; Pl.'s Ex. 36, at P–36–10 (“This material could generate high pH runoff.”). The 1992 report does not prioritize...