Eighth Circuit No Stranger To Lead Refinery Dispute

For the second time in the last hundred years, the Eighth Circuit last week had to decide a smelter-related dispute between the successor company to an owner of a massive Omaha lead refinery and smelter (the “petitioner”) and a railroad that leased the land (until the 1940s) on which the smelter operated.  To quote the court’s opinion, “The history of this case is an archetypal tale of industrial boom and environmental bust.”  The lead refinery and smelter started operating in the 1870s, and grew to become the nation’s largest lead refinery.  Environmental and safety issues, however, became plentiful.  In 1912, an independent study found that more than 22 out of every 100 facility employees had lead poisoning, and the smelter was believed to annually discharge several thousand pounds of lead and other heavy metals and pollutants directly into the Missouri River late into the 20th century.

In 2003, the EPA designated 27 square miles around the former facility as a Superfund site, and a bankruptcy court approved a $214 million settlement for the petitioner to resolve the EPA’s claims.  The railroad, named as a potentially responsible party by the EPA, later settled with the EPA for $25 million.  The petitioner did not object to the railroad’s settlement during the thirty-day public comment period (the consent decree was published in the Federal Register and sent directly to the petitioner), and the court approved the railroad/EPA settlement.  The petitioner then filed suit on the grounds that the railroad contributed too small of a share of the clean-up costs.  The Eighth Circuit disagreed, finding that the railroad’s settlement with the EPA entitled it to protection from contribution suits, which CERCLA clearly protects against:  “A person who has resolved its liability to the United States … in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.”  42 U.S.C. § 9613(f)(2).  Prior to settling with the EPA, the railroad had signed a tolling agreement with the petitioner, but the railroad’s right to contribution protection at that time was neither “known” or “existing” when the parties entered into that agreement, which was required under Nebraska law to constitute a “waiver” of a statutory right.

The petitioner also made an estoppel argument to the Eighth Circuit, but the court concluded that this argument was waived because it was not presented in arguing to the district court.  The petitioner claimed it was mentioned as part of a vague reference made in a motion to dismiss, but the Eighth Circuit borrowed a line from the Seventh Circuit’s United States v. Dunkel opinion and explained, “Judges are not like pigs, hunting for truffles buried in briefs.”