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Joseph A. Pakootas, An v. Teck Cominco Metals


June 1, 2011


Appeal from the United States District Court for the Eastern District of Washington Lonny R. Suko, Chief District Judge, Presiding D.C NO 2:04-cv-00256-LRS; D.C. No.2:04-cv-00256-LRS.

The opinion of the court was delivered by: Kleinfeld, Circuit Judge:



Argued and Submitted November 6, 2009-Seattle, Washington

Before: Arthur L. Alarcon, Andrew J. Kleinfeld, and Richard R. Clifton, Circuit Judges.

Opinion by Judge Kleinfeld


We address citizen suit jurisdiction under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

I. Facts

Teck Cominco Metals Limited (Teck Cominco), a Canadian mining company, owns a smelter in Trail, British Columbia. From 1905 to 1995, slag from the smelter was dumped in the Columbia River, ten miles north of the border with Washington.*fn1 Pollution flowed downstream into the United States.

In 1999, the Colville Tribes petitioned the Environmental Protection Agency (EPA) to assess environmental contamination in the Columbia River and Lake Roosevelt, which border their reservation's lands.*fn2 The EPA completed its investigation in 2003, determining that the Upper Columbia River site was eligible for inclusion on CERCLA's National Priorities List.*fn3 That list is colloquially called the "Superfund List" because sites on it are top priorities for cleanup and are eligible for CERCLA-financed remedial action.*fn4

While the EPA's investigation was still ongoing in 2002, Teck Cominco and its American subsidiary, Teck Cominco American Incorporated, negotiated with the EPA, but did not reach an agreement.*fn5 Complications arose from, among other reasons, Canadian government concerns about Canadian sovereignty and the American assertion of jurisdiction.

No voluntary agreement was reached, so the EPA in December 2003 issued a unilateral administrative order.*fn6 The order commands Teck Cominco and its American subsidiary to conduct a remedial investigation and feasibility study to assess the site conditions and to implement a cleanup.*fn7 Teck Cominco did not comply with the order.*fn8 The EPA took no action to enforce it.*fn9

Plaintiffs Joseph A. Pakootas and Donald R. Michel sued Teck Cominco to enforce the EPA's unilateral administrative order.*fn10 They founded jurisdiction on the citizen suit provision of CERCLA,*fn11 seeking: (1) a declaration that Teck Cominco was in violation of the order; (2) an injunction compelling compliance; (3) penalties for Teck Cominco's failure to comply; and (4) attorneys' fees and costs.*fn12

Teck Cominco moved to dismiss for lack of subject matter and personal jurisdiction, and for failure to state a claim upon which relief could be granted. Before the district court ruled on the motion to dismiss, the State of Washington intervened in the litigation and sought the same relief. The district court denied Teck Cominco's motion to dismiss, but certified the order for interlocutory appeal.*fn13 While that appeal was before us, the Confederated Tribes of the Colville Reservation joined as a party plaintiff. Subsequently, the State amended its complaint to seek the anticipated costs of the CERCLA recovery and assessment, as well as declaratory relief regarding the reasonable costs of assessing natural resource damages, a claim that is proceeding in district court. The Colville Tribes have added the same demand as the State, and these claims are now proceeding in district court.

We affirmed the district court's denial of Teck Cominco's motion. We held that the suit was not an extraterritorial application of CERCLA because even though the smelter was in Canada, slag had moved downstream into the United States.*fn14

Because a "site" where a hazardous substance has "come to be located" falls within the definition of a "facility" in CERCLA, we held that the EPA was not acting extraterritorially in addressing that downstream "facility."*fn15 The unilateral administrative order, we held, was addressed to this "facility" within the State of Washington.*fn16 We did not reach the ques- tion of whether Congress intended CERCLA to apply extraterritorially.*fn17

While that appeal was pending, but before we had decided it, the EPA and Teck Cominco settled. The settlement went into effect in June 2006. Teck Cominco, the Canadian company together with its American subsidiary, and the EPA, signed what they called a "contractual agreement" (not a stipulation for a consent decree or other court order) to perform remediation. Teck Cominco consented to personal jurisdiction in the United States District Court "solely for the limited purpose of an action to enforce" designated provisions of the contract. The EPA covenanted not to sue for penalties or injunctive relief for noncompliance with the unilateral administrative order, "conditioned upon the satisfactory performance" by Teck Cominco of its obligations under the contract. And pursuant to the contract, the EPA withdrew the unilateral administrative order. To this day, the EPA has taken no action to collect penalties for Teck Cominco's 892 days of noncompliance with that order.*fn18

Meanwhile, Teck Cominco had petitioned for certiorari from our decision. The Supreme Court, evidently considering the petition quite seriously, invited the Solicitor General to express the views of the United States. The Solicitor General, urging denial of certiorari, filed an amicus brief arguing both that the case was moot because of the settlement agreement, and that citizen suits for penalties could be brought only for ongoing, not past, violations. The Court denied certiorari, so these arguments were not ruled upon.*fn19

Plaintiffs then amended their complaint, no longer seeking declaratory and injunctive relief, but maintaining their claims for civil penalties for Teck Cominco's 892 days of noncompliance with the unilateral administrative order, and for costs and attorneys' fees. Teck Cominco once again moved to dismiss. The district court dismissed the claims under Rule 12(b)(1) for lack of jurisdiction. The district court granted a stipulated Rule 54(b) certification of its dismissal order, because Pakootas and Michel had no claims except for penalties for the 892 days of past noncompliance, and resolution of the remaining claims of the Colville Tribes and the State of Washington for response costs or damages from the cleanup might not be resolved for several years.

Plaintiffs appeal.

II. Analysis

We review a district court's Rule 12(b)(1) dismissal de novo.*fn20

The district court held that the Pakootas-Michel claim for penalties for the 892 days of noncompliance was a challenge barred by 42 U.S.C. § 9613(h), and that it did not fall within § 9613(h)(2)'s exception. We generally agree with the district court's careful analysis and affirm. Appellants argue that the district court erred in both respects, and also that these statutory limitations go only to whether a claim upon which relief could be granted was stated, and not jurisdiction.

A. Is 42 U.S.C. § 9613(h) jurisdictional?

[1] Plaintiffs argue that 42 U.S.C. § 9613(h) is a timing regulation, not a limitation on jurisdiction. We disagree. Here is the relevant statutory language:

(h) Timing of review

No Federal court shall have jurisdiction under Federal law other than under section 1332 of Title 28 (relating to diversity of citizenship jurisdiction) or under State law which is applicable or relevant and appropriate under section 9621 of this title (relating to cleanup standards) to review any challenges to removal or remedial action selected under section 9604 of this title, or to review any order issued under section 9606(a) of this title, in any action except one of the following:

(1) An action under section 9607 of this title to recover response costs or damages or for contribution.

(2) An action to enforce an order issued under section 9606(a) of this title or to recover a penalty for violation of such order.

(3) An action for reimbursement under section 9606(b)(2) of this title.

(4) An action under section 9659 of this title (relating to citizens suits) alleging that the removal or remedial action taken under section 9604 of this title or secured under section 9606 of this title was in violation of any requirement of this chapter. Such an action may not be brought with regard to a removal where a remedial action is to be undertaken at the site.

(5) An action under section 9606 of this title in which the United States has moved to compel a remedial action.*fn21

Plaintiffs argue that both the title of the subsection, "Timing of review," and a Seventh Circuit decision, Frey v. EPA,*fn22 establish that the statute merely regulates timing, and is not a true jurisdictional statute.

[2] Subsequent to the Seventh Circuit's decision, the Supreme Court clarified how to determine whether a statute limits jurisdiction or simply affects whether a claim for relief can be stated.*fn23 Arbaugh v. Y & H Corp. concedes that the Supreme "Court and others have been less than meticulous" about when statutes should be deemed "jurisdictional."*fn24

Rejecting what it called "drive-by jurisdictional rulings,"*fn25 the Court adopted a "readily administrable bright[-]line" test.*fn26 "If the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue."*fn27 If not, then the restriction is non-jurisdictional.*fn28

The Court reemphasized this bright-line test last year in Reed Elsevier, Inc. v. Muchnik, focusing on whether the word "jurisdiction" was used in a sentence controlling the claim at issue.*fn29

And even more recently in Henderson v. Shinseki, the Court held that the 120-day deadline for filing appeals in Veterans Court was non-jurisdictional because the provision at issue did not speak in jurisdictional terms.*fn30

[3] Here, the statute says "[n]o Federal court shall have jurisdiction . . . ."*fn31 That language expressly addresses jurisdiction, satisfying the bright-line test of Arbaugh.*fn32 Because the words are "[n]o Federal court shall have jurisdiction," the statute means that no federal court shall have jurisdiction. The statute limits the timing of judicial review*fn33 by means of the "jurisdiction-stripping provision contained in 42 U.S.C. § 9613(h)."*fn34 Were we to wiggle around the words "[n]o Federal court shall have jurisdiction" because of the timing language, we would be doing just the sort of "wrestl[ing]" Arbaugh rejects in favor of a bright-line test.*fn35 As we held in McClellan Ecological Seepage Situation v. Perry, the statute "amounts to a 'blunt withdrawal of federal jurisdiction.' "*fn36

B. Does the jurisdictional bar apply?

(1) Is the Pakootas-Michel suit for penalties a "challenge"?

[4] The jurisdictional bar applies to "challenges to removal or remedial action . . . ."*fn37 The statute " 'withholds federal jurisdiction to review . . . claims, including those made in citizen suits and under non-CERCLA statutes, that are found to constitute 'challenges' to ongoing CERCLA cleanup actions."*fn38

Appellants argue that they make no challenge to the ongoing remedial action pursuant to the contract, because all they seek are penalties for the 892 days of past noncompliance with the withdrawn unilateral administrative order.

[5] Congress made a choice to "protect[ ] the execution of a CERCLA plan during its pendency from lawsuits that might interfere with the expeditious cleanup effort."*fn39 As we held in McClellan, where the EPA works out a plan, and a citizen suit "seeks to improve on the CERCLA cleanup" because it "wants more," that constitutes interference.*fn40 Such a claim "would second-guess the parties' determination and thus interfere with the remedial actions selected . . . ."*fn41

True, plaintiffs seek only past penalties, not any additional requirements for the ongoing cleanup. But that demand is still a challenge.

First, Teck Cominco and the EPA made a deal to accomplish the cleanup. Part of their contract is that the penalties are neither sought nor waived. They are the EPA's hammer, held over Teck Cominco's head. The penalties are not Pakootas and Michel's hammer to wield. The penalties are the EPA's hammer.

[6] Under the agreement, the United States covenanted not to sue for the penalties for the 892 days, "conditioned upon the satisfactory performance" by Teck Cominco of its cleanup obligations.*fn42 That conditional covenant not to sue means that if Teck Cominco does not perform its obligations, the EPA can bring down its hammer, by seeking penalties of up to $27,500 a day for 892 days,*fn43 more than $24 million. The penalties Pakootas and Michel want to enforce are the hammer EPA retained to compel performance of the agreement. If Pakootas and Michel were to enforce the penalties, the EPA would be left bare-handed, without this weapon. And if Teck Cominco paid the parties adjudicated before the cleanup was done, it might find it economically advantageous to walk away from further cleanup efforts, an "efficient breach."*fn44

Also, were the EPA to seek to enforce the agreement at that point, all the risks to its position raised by extraterritoriality concerns and other litigation hazards would rise again.*fn45 Like all litigation, a lawsuit against Teck Cominco could go sour for the EPA. No doubt that risk played into its decision to settle the matter by contract.

[7] In addition, penalties exacted before a cleanup is completed may interfere with the ability to perform a cleanup. While Teck Cominco may, for all we know, have the ability to pay $24 million in penalties and possibly a great deal of additional money to Pakootas and Michel for attorneys' fees, and still have plenty of money left for a cleanup, that cannot be assumed for this or for all cases. Many polluters do not have unlimited financial resources. Sometimes the orange is squeezed dry. And if it is, whatever juice going to the government in penalties and to the lawyers in fees cannot go from the polluter to the contractors who perform the cleanup work.

A suit for past penalties always has the potential to interfere with ongoing cleanup efforts, because of its potential effect on the responsible party's financial ability to perform the cleanup. The $24 million in potential penalties that the contract holds over Teck Cominco's head not only works as a hammer, but also as a means by which Teck Cominco can perform the cleanup or pay the money to the government. Some polluters, facing a suit for past penalties while cleanup is ongoing, may simply go bankrupt and leave,*fn46 or use the threat of bankruptcy as their own hammer to hold over the EPA's head.

Appellants argue that our decision in ARCO Environmental Remediation, LLC. v. Montana Department of Health & Environmental Quality limits "challenges" to claims that would dictate specific remedial actions or reporting requirements or otherwise alter the cleanup plan.*fn47 It does not. In that case, ARCO, a potentially responsible party, sued a State of Montana agency to get access to documents pertaining to an agreement between the State of Montana and the EPA relating to a cleanup.*fn48 It was not a citizen suit for penalties, nor did it affect in any way the ongoing cleanup.*fn49 We held that the lawsuit to obtain access to documents "involves only the public's right of access to information about the cleanup," so it was not a "challenge."*fn50 Appellants would have us parse the word "incidental" in the decision, and infer a negative pregnant from the distinction ARCO drew between the suit for documents and several cases where we had held that citizen suits were "challenges." But our decision in ARCO does not hold, as appellants argue, that no suit is a "challenge" unless it seeks to dictate specific remedial actions, to postpone the cleanup, to impose additional reporting requirements, or to terminate or alter a cleanup.*fn51 These were the "challenges" that ARCO distinguished. The holding of ARCO is that a suit for documents is not a challenge to an ongoing cleanup, not that challenges are limited to the four cases ARCO distinguishes.*fn52

Finally, if suits for penalties are not "challenges," Congress would not have had to make an exception for EPA suits to recover penalties. The EPA could seek penalties without subsection (h)(2), if penalties were not "challenges." Subsection (h)(2) would thus be surplusage if a suit for past penalties were not a "challenge[ ]."

[8] A citizen suit for penalties is indeed a "challenge[ ] to removal or remedial action selected by EPA . . . ."*fn53

(2) Does the penalty exception apply?

Plaintiffs argue alternatively that even if a citizen suit for penalties while remediation is ongoing is a challenge, the jurisdiction-stripping statute has an exception for such suits. They rely on subsection (h)(2),*fn54 quoted in context above.

Subsection (h)(2) does not apply to citizens suits. Plaintiffs argue for a "plain language" reading, and we agree that such a reading is appropriate. But it does not suffice to only read the word "penalty." We must read all of the statutory language, including the word "recover."*fn55 That word means, in this context, to get money. Ordinarily, "recover" "refers to the getting back of something lost," or "[t]o receive a favorable judgment in a lawsuit."*fn56 If Pakootas and Michel were the parties entitled to "recover" the penalties for the 892 days of non-compliance, then the exception would apply to them. But they are not.

[9] The penalty provision speaks to penalties for violation of orders issued under 42 U.S.C. § 9606(a). Such penalties are denoted in § 9606(b) as "Fines."*fn57 The fines are paid to the EPA as an enforcement or cost recovery action for the Super-fund.*fn58 They are not disbursed to persons claiming to be injured by the pollution. The statutory scheme provides that a person who without sufficient cause fails to comply with an order such as the one at issue in this case "may . . . be fined . . . for each day."*fn59 In appropriate circumstances, reimbursement of the fine or a portion thereof "from the [Super]Fund" may be sought.*fn60 The penalty money is Superfund money, payable to the government, not payable to citizens who bring lawsuits.

[10] Thus what Pakootas and Michel seek is not a penalty payable to themselves, but enforcement of a penalty payable to the Superfund. Such a lawsuit is not one to "recover" money. It is one to compel the payment of money to the Superfund. If we had jurisdiction, there would be a serious question as to whether Pakootas and Michel could state a claim for the EPA to recover money it has chosen not to recover at this time, but we cannot even consider that question unless the exception applies, since without the exception, we lack jurisdiction.

[11] Citizen suits for specified relief, including penalties, are provided for in 42 U.S.C. § 9659. That provision subjects citizen suits to the § 9613(h) exceptions: "Except as provided . . . in section 9613(h) of this chapter relating to timing."*fn61

Section 9613(h)(2) provides an exception to the jurisdictional bar for actions "to enforce an order issued under section [9606(a)] of this title or to recover a penalty for violation of such order."*fn62 Thus, this exception to jurisdiction stripping allows the government to enforce its orders and recover penalties for violation of them even when a cleanup is ongoing. And only the government has that prerogative.

This statutory scheme becomes much easier to interpret if we consider the sections together, to figure out what rational purpose Congress might have had.*fn63 And that purpose, as we have said, is to prevent lawsuits that would interfere with the cleanup process.*fn64 It makes sense that if the polluter is not performing its cleanup duties, then the EPA can swing its hammer without waiting for years until the cleanup is done. It does not make sense to read the statute as though it allowed a citizen suit to take away this compliance device before the cleanup is complete. And that pragmatic arrangement is the one the words of the statute adopt.

The separate citizen suit exception that Congress provided to the jurisdiction-stripping statute bolsters this reading. Citizen suits are allowed under subsection (h)(4) for claims that the remediation itself violates the statute.*fn65 We note that even in this circumstance, Congress wrote an exception to this citizen suit exception (so that jurisdiction remains absent), "where a remedial action is to be undertaken at the site."*fn66

This careful structuring by Congress would be gutted if a citizen suit could escape the limitations and the exception to the exception in subsection (h)(4). Yet that is just what plaintiffs urge, dancing around subsection (h)(4)'s citizen suit provision and trying to use the different exception in subsection (h)(2).

Subsection (h)(4) is the exception for citizen suits. It makes sense in this statute to apply "the expressio unius, or inclusio unius, principle."*fn67 Subsection (h)(2) is thus for the government, so that it can wield its own hammer during the cleanup if it deems that prudent, subsection (h)(4) is for citizen suits. The provisions for a citizen suit in subsection (h)(4) imply that citizen suits are not allowed under subsection (h)(2).

[12] We have found no circuit court authority to aid us in this interpretation. Plaintiffs urge us to follow a district court case from Puerto Rico,*fn68 defendants a (more thoroughly reasoned) district court case from our own circuit.*fn69 We agree with the conclusion reached in Fairchild Semiconductor Corp. v. EPA that the (h)(2) exception applies only to "[a]n action to enforce an order issued under section 9606(a) of this title or to recover a penalty for violation of such order[,]" and that only the government may issue orders or recover penalties for violations of those orders under § 9606(a),*fn70 so subsection (h)(2) does not apply to citizens suits. Both sides cite snippets of language from our decisions in our earlier decision in this case,*fn71 McClellan Ecological Seepage Situation v. Perry,*fn72 and City of Rialto v. West Coast Loading Corp.,*fn73 but in none of those cases were we faced with deciding whether citizen suits for penalties fall within the subsection (h)(2) exception. Now we are. We conclude that they do not.

III. Conclusion

[13] As the district court correctly concluded, it lacked jurisdiction to adjudicate the Pakootas and Michel claims for penalties for the 892 days of noncompliance with the unilateral administrative order, and properly dismissed their claims.


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