The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge
Both the United States and the California Department of Toxic Substances (hereinafter collectively referred to as "Plaintiffs" or "government" unless otherwise specified) have designated the former Lava Cap Mine, located in Nevada County, California, as a Superfund site polluted by elevated levels of arsenic that were disseminated through tailings and waste materials generated by mine operations. Plaintiffs have undertaken cleanup efforts designed to remediate that arsenic contamination.
The present action seeks contribution for the costs of those activities both from former owners of the site and operators responsible for its mining. Presently before the Court are two Motions for Partial Summary Judgment as to the CERCLA liability of Defendant Sterling Centrecorp, Inc. ("Sterling"). Plaintiffs' first motion (as to Sterling's liability) argues that the prerequisites for the recovery of response costs under CERCLA as against Defendant Sterling, and in particular Elder's status as a "covered person" under the terms of the statute, have been established as a matter of law. Plaintiffs' second motion seek a determination rejecting, as a matter of law, any affirmative defenses asserted on Sterling's behalf. As set forth below, Plaintiffs' liability motion will be denied; the motion as to availability of affirmative defenses will be granted in part and denied in part.*fn1
Mining operations at the Lava Cap Mine commenced in 1861. Between 1934 and 1943, mining was conducted at the site by the Lava Cap Gold Mining Corporation ("LCGMC"). During that time period, the Lava Cap Mine was one of the leading gold and silver producers in California, and among the top twenty-five gold producers in the nation. Plaintiffs' Statement of Undisputed Fact ("SUF") No. 4.
In 1938, LCGMC built a tailings dam on Greenhorn Creek (now known as Lost Lake Dam) to stop mine tailings from polluting the waters of the Bear River. SUF Nos. 9, 10. Waste products included within the mine-generated tailings contained elevated concentrations of naturally occurring arsenic, a hazardous substance pursuant to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq. ("CERCLA"). SUF No. 80-81.
No active mining occurred at Lava Cap after 1943, when its operations were shut down by the United States government during the Second World War. SUF No. 12. In 1950, LCGMC decided to sell, lease, or exchange all the property and assets of the company. In 1952, LCGMC's directors recommended a sales transaction between LCGMC and New Goldvue Mines Limited, a Canadian company developing a gold mine in Quebec and looking to upgrade its equipment. A purchase and sale agreement was subsequently executed between the two companies. Pursuant to that agreement, New Goldvue, having "been advised as to the...assets and liabilities of [LCGMC], agreed to purchase "all the assets of [LCGMC], subject to the liabilities of [LCGMC], which liabilities [New Goldvue] agreed to assume and cause to be paid promptly." SUF No. 19. The sales agreement further specified that LCGMC's assets would be transferred to Keystone Copper Corporation ("Keystone"), a wholly-owned subsidiary of LCGMC, before Keystone was itself conveyed to New Goldvue.
Keystone, which had previously operated a copper mine while a LCGMC subsidiary, thus became a wholly-owned subsidiary of New Goldvue.*fn2 See SUF No. 33.
The sales transaction between New Goldvue and LCGMC was financed by a transfer of New Goldvue stock. SUF No. 19. After the LCGMC purchase was consummated, New Goldvue expanded its board from five to seven and appointed two individuals previously associated with LCGMC to the New Goldvue Board of Directors. See SUF No. 20. LCGMC was subsequently dissolved. SUF No. 35.
New Goldvue, which was originally incorporated in Ontario, Canada as Goldvue Mines Limited in 1944, changed its name several times over the years before becoming Sterling in 2001.*fn3 Until 1985, the company now known as Sterling was primarily a natural resources company with investments in mining and oil and gas production. Sterling, through its subsidiary Keystone, owned the Lava Cap Mine for some 37 years (aside from a brief, ultimately unsuccessful attempt to transfer ownership to another company). No mining occurred during that period.
In 1979, a partial log dam collapse led to a release of mine tailings which, in turn, caused downstream neighbors to complain about pollution from the resulting silt. In response to those complaints, the California Regional Water Quality Control Board issued a Cleanup and Abatement Order to Keystone on October 25, 1979. See SUF No. 82.
Following an ultimately unsuccessful attempt to sell the Lava Cap Mine to another company, Keystone sold, in 1989, the property to Banner Mountain Properties, Ltd., an entity controlled by Defendant Stephen Elder, who currently owns four of the seven parcels comprising the former mine site. SUF Nos. 77, 120-23. The remaining three parcels are owned by another Elder business interest, Defendant Elder Development, Inc. Elder had an engineering firm prepare a Preacquisition Site Assessment before his purchase of the mine site that revealed hazardous substance contamination, primarily arsenic. SUF No. 127.
The United States Environmental Protection Agency ("EPA") completed a Preliminary Assessment on the mine site in April of 1993, after Banner Mountain's purchase of the mine site. See SUF No. 86. Sediment and soil samples revealed elevated concentrations of both arsenic and lead.
Heavy rainstorms in 1993 washed mine wastes downstream into Little Clipper Creek and a former mine tailings pond now known as Lost Lake. SUF No. 88. The EPA began cleanup operations in late 1997 and the site was officially designed a Superfund site in January of 1999. SUF Nos. 89-90. Those operations included the removal and relocation of tailings, reinforcement of the log dam, and diversion of Little Clipper Creek around the tailings pile.
Id. Future remedial work contemplated by the EPA for the site will include actions to address the polluted groundwater. The EPA estimates that it spent at least $20 million in response costs at the site as of April 30, 2008. SUF No. 100. The State of California Department of Toxic Substances alleges that its own response costs as of December 2010 are another $1,0000,000. There is no dispute that the release of hazardous substances at the mine site is responsible for the response costs that have been incurred by Plaintiffs. See SUF No. 102.
As indicated above, Plaintiffs now seek partial summary judgment with respect to Defendant Stephen P. Elder's liability.*fn4
Aside from responding to the Statement of Undisputed Facts filed by Plaintiffs with respect to all four of their concurrently filed summary judgment requests, Defendant Elder has otherwise filed no opposition to the instant motion.
The Federal Rules of Civil Procedure provide for summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
One of the principal purposes of Rule 56 is to dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. at 325.
Rule 56 also allows a court to grant summary adjudication on part of a claim or defense. See Fed. R. Civ. P. 56(a) ("A party may move for summary judgment, identifying...the part of each claim or defense...on which summary judgment is sought."); see also Allstate Ins. Co. v. Madan, 889 F. Supp. 374, 378-79 (C.D. Cal. 1995); ...