Sidley achieved an important trial victory in the Federal District Court for the District of New Mexico on behalf of Chevron Mining Inc. (Chevron) that resulted in a bench decision allocating at least US$300 million of cleanup costs from a superfund site to the United States Government. The site, a now-defunct molybdenum mine located near Questa, New Mexico, is owned by Chevron. As the current owner, Chevron is liable under CERCLA for the cleanup costs, which the EPA estimates as at least US$1 billion. The court found that the United States Government, as a former owner actively involved with the mine, should bear 30% of the cleanup costs applying CERLCA “allocation” rules. This ruling is extremely favorable for Chevron, as the United States Government took the position at trial that no allocation be assigned to it at all.
The evidence presented at trial spanned the better part of a century. On June 28, 2022, Judge Kelly entered a Declaratory Judgement in favor of Chevron which allocates “30% of all past and future eligible response costs to the United States.” In the supporting Findings of Fact and Conclusions of Law, Judge Kelly outlined the “Equitable Allocation Considerations Under CERCLA.”
The Chevron case provides important guidance related to application of CERLCA allocation rules to remediation of sites developed on current or former government lands. Starting in 1866, the United States opened up federal lands for prospecting and mining activities in order to encourage the discovery and development of useful mineral resources. CERCLA establishes liability for current and former owners of Superfund sites, and states that the United States shall be treated the same as any other former owner. Prior to this case, the United States had argued successfully that in such cases it had only “bare legal title” and had avoided liability. This case clarifies that the United States must bear its fair share where it was the land owner and was actively involved with the mine site. The ruling also brings to a close a decades long chapter in the history of New Mexico, and provides a path forward for the cleanup of this important land for future generations.
Chevron Mining Inc. v. United States of America et al, No. 294 D. N. M. 1:13-cv-00328-PJK-JFR, U.S. District Court for the District of New Mexico.
Lead Counsel: Partners, Mark Hopson (Washington, D.C.) and Gordon Todd (Washington, D.C.).
Sidley Trial Team: Partners, Ellen Crisham Pellegrini (Washington, D.C.) and Ben Mundel (Washington, D.C.); and Associates Matt Simpson (Washington, D.C.) and Alexia Jansen (Washington, D.C.).