Columbia Falls Aluminum Co. v. Atl. Richfield Co.

COLUMBIA FALLS ALUMINUM COMPANY, LLC, Plaintiff, v. ATLANTIC RICHFIELD COMPANY, Defendant.

No. CV 18-131-M-DWM

United States District Court, D. Montana, Missoula Division

August 25, 2021

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Donald W. Molloy, Distrtct Judge

The trial in this case arises out of a dispute between Plaintiff Columbia Falls Aluminum Company, LLC ("CFAC") and Defendant Atlantic Richfield Company ("ARCO") over the parties' respective environmental liabilities at an aluminum smelter in Columbia Falls, Montana ("the Site"). In July 2018, CFAC sued under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") and its state analog (the Montana Comprehensive Environmental Cleanup and Responsibility Act or "CECRA"), seeking cost recovery and contribution for its liability as the current owner and operator of the Site. ARCO counterclaimed and argues that the parties' 1985 Acquisition Agreement bars suit and that, even if it did not, CFAC cannot recover under either CERCLA or CECRA.

A 7-day bench trial took place in Missoula, Montana beginning on June 28, 2021. CFAC presented seven witnesses:

- Andrew Baris, remediation expert;

- David Batson, allocation expert;

- John Stroiazzo, a Glencore consultant at the Columbia Falls facility;

- William Muno, cleanup cost expert;

- Andrew Otis, CFAC's regulatory counsel;

- Jeffrey Dunn, rebuttal financial expert; and

- Kraig Kosena, rebuttal appraisal expert.

ARCO presented six witnesses:

- Brian Johnson, strategy manager for ARCO;

- Marcia Williams, industrial site closure expert;

- Peter Jewett, remediation expert;

- David Hall, financial expert;

- Thomas Stevens, appraisal expert; and

- Gayle Koch, cleanup cost expert.

The parties also presented deposition testimony of:

- Steven Wright, CFAC's only employee and Site Manager;

- Subodh Das, ARCO environmental manager in the 1980s; and

- John R. Lucas, ARCO attorney involved in 1985 acquisition. Notably, neither party deposed or called Brack Duker as a witness in the case even though he was a critical player in disposing of ARCO's assets and negotiating the 1985 Acquisition Agreement in favor of his new company.

Based on the evidence and testimony presented at the trial, and further considering the applicable law and the parties' written submissions, the following findings of fact and conclusions of law are made pursuant to Federal Rule of Civil Procedure 52.

TABLE OF ACRONYMS

ARCO Atlantic Richfield Company

CECRA Comprehensive Environmental Cleanup and Responsibility Act

CERCLA Comprehensive Environmental Response, Compensation, and Liability Act

CFAC Columbia Falls Aluminum Company, LLC

EPA United States Environmental Protection Agency

MDEQ Montana Department of Environmental Quality

MDHES Montana Department of Health and Environmental Sciences

MPDES Montana Pollutant Discharge Elimination System

PAH polyaromatic hydrocarbon

PCB polychlorinated biphenyl

PRP Potentially Responsible Party

RCRA Resource Conservation and Recovery Act

SPL Spent Potliner

WSSP Wet Scrubber Sludge Pond

Table of Contents

i operational history..............................................................................6

ii. party arguments...................................................................................16

A. CFAC..........................................................................................................16

B. ARCO.........................................................................................................17

III. CONTRACTUAL LIMITIONS ON SUIT....................................................17

A. The Agreements..........................................................................................18

1. The Acquisition Agreement.....................................................................18

2. The Supplemental Agreement.................................................................20

3. 1988 Settlement.......................................................................................21

B. Section 10....................................................................................................22

1. Covenant Not to Sue................................................................................23

2. Assumption of Environmental Liabilities...............................................38

3. Conclusion...............................................................................................40

IV. SITE OVERVIEW.........................................................................................41

A. Waste Streams.............................................................................................41

1. Spent Potliners ("SPL")...........................................................................41

2. Wet Scrubber Sludge...............................................................................43

3. Soaking Pits.............................................................................................44

4. Other Wastes............................................................................................45

5. Technological Advancements..................................................................46

6. Permitted Discharges...............................................................................47

B. Site Conditions............................................................................................50

1. West Landfill...........................................................................................51

2. Wet Scrubber Sludge Pond ("WSSP")....................................................54

3. Center Landfill.........................................................................................59

4. East Landfill.............................................................................................60

5. Industrial Landfill....................................................................................62

6. Asbestos Landfill.....................................................................................63

7. Former Drum Storage Area.....................................................................63

8. Soil North of Main Plant Buildings.........................................................64

9. North Percolation Ponds..........................................................................65

10. Groundwater............................................................................................67

C. EPA Action and National Priority List.......................................................77

1. Initial CERCLA Investigation.................................................................77

2. The Remedial Investigation.....................................................................81

3. The Feasibility Study...............................................................................84

V CERCLA COST RECOVERY.........................................................................87

A. EPA Remediation.......................................................................................94

1. EPA..........................................................................................................94

2. Roux.........................................................................................................94

3. ERM Consulting & Engineering.............................................................95

4. Hydrometrics, Inc....................................................................................97

5. MBS GeoConsulting, Ltd........................................................................98

B. South Percolation Ponds...........................................................................100

1. Morrison-Maierle, Inc............................................................................107

2. Montana Helical Piers............................................................................107

3. Sandry Construction..............................................................................108

C. Plant Demolition and Backfilling.............................................................109

1. Calbag....................................................................................................109

2. Aqua Terra Restoration.........................................................................114

D. Removal of Hazardous Materials and Wells............................................115

1. Mountain States Environmental Services, Inc.......................................115

2. IRS Environmental................................................................................116

3. MWC Viking Pump...............................................................................117

E. Public Relations........................................................................................118

1. Allegra Marketing..................................................................................118

2. Ann Green/Mary Green Communications.............................................118

3. Haley Beaudry.......................................................................................121

4. Jacob Hall Design..................................................................................121

5. Sard Verbinnen & Co............................................................................122

F. Attorney Fees...............................................................................................122

G. Glencore/CFAC Employees.....................................................................126

H. Costs Barred By Agreement.....................................................................129

VI. EQUITABLE...