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Counterclaims & Third-Party Claims

Natural Resource Damages CLE - November 29-30, 2007

Presented by:Ken LedermanRiddell Williams P.S.

Riddell Williams P.S. 22

Goals

Discuss the strategic pros and cons

Sovereign Immunity issues

Options (incl. Cross-Claims)

Case law?

Try not to bore the heck out of you


Why are Counterclaims Important under CERCLA?

Federal Government is the #1polluter in U.S. history

In liability claims, EPA doesn’tsue other federal agencies

Minimal Opportunities Contribution actions more favorable

Because you have to sue somebody When in doubt, blame the person blaming you


FRCP 13 - Counterclaims

Compulsory when claim “arises out of thetransaction or occurrence that is the subject matterof the opposing party's claim.” Permissive when claim is independent

Right to assert counterclaims against the UnitedStates or a U.S. officer or agency is not enlarged bythe Rule

Claim must seek same kind of relief Claim against U.S. Government

must be defensive only Defeat claim, not seek damages No injunctive relief


CERCLA Counterclaims & Affirmative Defenses

Limited Defenses per § 107 Act of God, Act of War, Act or Omission of 3rd party Federally-Permitted Release - § 107(j) No Double Recovery

Includes “Different Trustee, Same Damage”

Equitable defenses nearly always rejected in CERCLA liabilitylitigation for recovery of response costs Contributory Negligence, Assumption of Risk, Unclean Hands, Laches No declaratory judgment or injunctive relief Can’t use state law to bring claim that would be precluded by federal law

Third-party claim for contribution is OK CERCLA and Common Law Prove that another party caused or contributed to the injury / damage

NOT the third-party defense at § 107(b)(3)

Same application for NRD claims


Differences between Liability Phase and NRD Phase

Liability Phase

Causation = Focus on the Release and the Response Costs

Counterclaim? Claims against EPA for “damage” due

to bad management, negligence, ormisconduct nearly always fail

Not part of same transaction andoccurrence - the original “release”

Third-Party Claim Burden = Prove Release + Resulting Costs

NRD Phase

Causation = Focus on Result, not the Release or the Response Costs Counterclaim?

Part of the same transaction and occurrence? Possible, but…. Viable? Trustees caused NRD? Directed action which caused NRD?

Third-Party Claim EPA not a Trustee - Third-party claim or (possibly) cross-claim Burden = Prove Release + Prove Damage from the Release


So What Counterclaims are Left?

Recoupment Defensive claim designed to reduce

recoverable damages, not obtain recovery

Defenses Desiring to be Counterclaims Inconsistency with NCP Procedural Irregularities with the ROD Citizen Suit per § 310(a) All releases & damages occurring before 1980

Coeur d’Alene v. ASARCO, 280 F. Supp. 1094

Counterclaim for Contribution Viable for NRD Claim? More Viable for Third-Party Claim?

Federal Tort Claims Act, 28 U.S.C. § 1346 Must be able to bring the claim separately as an original action

under a statute which waives sovereign immunity Need jurisdiction in the same court


Sovereign Immunity – U.S. Government

Waived per § 107(g) and §120(a)(1) Limited waiver; not an open-ended opportunity Similar to other waivers for other environmental statutes

(U.S. Dept. of Energy v. Ohio, 503 U.S. 607)

Courts have NOT used Sovereign Immunity waiver to allowclaims against EPA regarding effectiveness of remedial action EPA management of a cleanup (no matter how bad) is NOT the

equivalent of a party releasing waste Same rule applies to Trustees for NRD cases?

Courts have NOT used Sovereign Immunity waiver to allowclaims against U.S. Government for mere ownership of property BUT - U.S. v. Newmont USA (2007 WL 2386425, Aug. 21, 2007)

U.S. (Dept. of Interior) liable due to actions taken in capacity as trusteeof Tribal lands (control operations, inspect property, etc…)

Due to sufficient “indicia of ownership” – very fact-specific


Sovereign Immunity – State Governments & Tribes

States get same statutory protections as U.S. Government Same § 107 limitations Can still be sued for contribution (fact-dependent)

State filing a suit under CERCLA can be sued for claimsarising out of the same transaction and occurrence Affirmative act waives 11th Amendment protection

State Law may offer other opportunities (code & common law) Intervention?

Not a waiver of sovereign immunity Necessary as protection from Estoppel

Teck Cominco / Lake Roosevelt – 9th Circuit

Native American Tribes have co-extensive waiver of sovereignimmunity as per U.S. Government Berrey v. Asarco, 439 F.3d 636 (10th Cir. 2006)


FRCP 13 – Cross-Claims

Permissive for claims:

(1) arising out of the transaction or occurrence that is the subject matter either of the original action; or

(2) arising out of a counterclaim therein; or

(3) relating to any property that is the subject matter of the original action.


Problems with Cross-Claims

Inherently Self-Defeating

Enemy of my Enemy is …. Still my Enemy?

Impedes Collaboration

No impact on J&S Liability to EPA for liability BUT – J&S Liability is not automatic in NRD cases


Possible Solutions / Options?

Tolling Agreements Focus on cooperative / collaborative approach Fight the common enemy

Agree to Disagree by Court Order Request Court Order establishing that all

defendants sue each other and all defendantsdeny all claims

Stay all discovery or motion practice pendingresolution of EPA or Trustees claims

Permit claims against the unnamed oruncooperative

Questions?

Please contact me any time with additional questions.

Ken [email protected]

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