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El Paso Natural Gas Co. LLC v. United States

United States District Court, D. Arizona

April 16, 2019

El Paso Natural Gas Company, LLC, Plaintiff,
United States of America, et al., Defendants.


          David G. Campbell, Senior United States District Judge.

         This case concerns environmental liability under the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) for 19 uranium mines located near Cameron, Arizona, on the Navajo Nation Reservation (the “Mine Sites”). Plaintiff El Paso Natural Gas Company, LLC, whose predecessors operated the mines in the 1950s and 1960s, brings claims against Defendants United States of America, the Department of the Interior (“DOI”), the Bureau of Indian Affairs (“BIA”), the United States Geological Survey (“USGS”), and the Department of Energy (“DOE”) (collectively, the “United States”) for cost recovery and contribution. Doc. 55 ¶¶ 1-2.[1] The United States asserts a CERCLA counterclaim against El Paso for contribution. Docs. 53, 66.[2]

         El Paso stipulates that it was an operator of the Mine Sites for purposes of CERCLA liability (Doc. 108), and the Court previously held that the United States is liable as an owner of the land where the mines are located (Doc. 135). The parties assert additional grounds for CERCLA liability against each other and ask the Court to make an equitable allocation of past and future response costs under CERCLA § 113.

         The Court held an eight-day bench trial in February and March, 2019. Each side presented many witnesses, live or by deposition, and hundreds of exhibits. The parties also submitted extensive proposed findings of fact and conclusions of law, as well as post-trial briefing on specific issues addressed in this order. For reasons set forth below, the Court will allocate 65% of past and future response costs to El Paso and 35% of such costs to the United States.

         I. Findings of Fact.

         This order sets forth the Court's findings of fact and conclusions of law under Rule 52 of the Federal Rules of Civil Procedure. The Court provides some citations to the record, but the citations should not be regarded as the sole basis for the Court's ruling. The Court's findings and conclusions are based on all of the testimony and exhibits admitted in evidence.

         A. The Parties.

         El Paso is the corporate successor of Arrowhead Uranium Company (“Arrowhead”), Rare Metals Corporation of America (“Rare Metals”), and El Paso Natural Gas Company. Doc. 159 at 8.[3] Arrowhead and Rare Metals mined uranium at the Mine Sites. Arrowhead was one of the original uranium mining companies in the Cameron region of Northern Arizona, operating from 1952 to 1954. Ex. 28 at 7-8. Rare Metals was formed in 1954 to prospect, explore, and acquire properties containing uranium deposits and other valuable minerals. Rare Metals acquired Arrowhead in December 1954 and took over its uranium mining operations. See Exs. 1040-44. Rare Metals also engaged in uranium exploration and development in Utah, New Mexico, California, and other locations. Exs. 1041 at 7; 1042 at 6, 8; 1043 at 5-7, 9. Rare Metals merged with El Paso in 1962. Ex. 1056. El Paso also takes responsibility for the mining activities of Cameron Mining Company at several of the Mine Sites. Doc. 159 at 8.

         The land where the Mine Sites are located is owned by the United States in trust for the Navajo Nation. See 25 U.S.C. § 640d-9(a); Doc. 159 at 7. The DOI and the BIA, as part of their tribal trust responsibilities, oversaw some aspects of the mining permits and leases for the Nation. Doc. 159 at 8; Ex. 12 at 2. The USGS, which is part of the DOI, collects, analyzes, monitors, and provides information about natural resources. Docs. 1 ¶ 19; 23 ¶ 19. DOE is the successor agency to the former Atomic Energy Commission (“AEC”). Doc. 23 ¶ 20. After World War II, the AEC was responsible for creating and managing a program to procure uranium for nuclear weapons, known as the Domestic Uranium Procurement Program (“DUPP”). Ex. 74 at 6.

         B. The Cold War and the Domestic Uranium Industry.

         The United States' use of atomic bombs in Japan both hastened the end of World War II and sparked the Cold War with the Soviet Union. Both nations aggressively developed nuclear weapons. Obtaining uranium, a naturally occurring metal that was an indispensable component of such weapons, became a driving objective of the United States' national defense effort. Doc. 158 ¶ 12.

         In 1946, Congress passed the Atomic Energy Act, which formed the AEC. See 60 Stat. 755. The Act also established the DUPP, a program for “the production, ownership, and use of fissionable material to assure the common defense and security and to insure the broadest possible mining of the fields.” Ex. 74 at 6. Viewing foreign sources of uranium as unreliable, the United States sought, through the DUPP, to locate and develop domestic sources using a combination of government-led exploration and private enterprise incentives. Tr. at 94-95. At the time, the federal government was the only authorized purchaser of uranium in the United States. Atomic Energy Act of 1946 § 5(2); Ex. 74 at 14.

         Between 1948 and 1956, the AEC published nine circulars offering guaranteed minimum prices and bonus payments for uranium ore (the “Circulars”). See Ex. 41. Circulars 3, 4, 5, and 6 applied to uranium mining on the Colorado Plateau, a geographic area encompassing some 140, 000 square miles in Arizona, Utah, Colorado, and New Mexico. Ex. 1002; Doc. 159 at 7. Circular 3 guaranteed, for three years, a minimum price and “development allowance” of fifty cents per pound for uranium ore of .15% grade or more. Ex. 41 at 3-4; see also id. at 8-9 (Circular 5 Revised). Circular 4 established a haulage allowance of six cents per mile for the first 100 miles. Id. at 5. Circular 5 also guaranteed a minimum price and expanded the development allowance to ore with uranium concentrations as low as .10%. Id. at 6. Circular 6 created an additional bonus for the production of uranium ore from new domestic mines. Id. at 13-14.

         The AEC assisted the young domestic uranium industry by conducting geologic surveys, furnishing free testing and assaying services, and agreeing to purchase uranium ore. Ex. 25 at 13. The AEC established ore-buying stations in uranium-producing areas. Id. The AEC's assistance programs included research and development that led to improvement in milling processes and other mining-related innovations. Id.; see also Chenoweth Depo. Jan. 15, 2014, at 85.[4]

         Beginning in 1948, the AEC, assisted by the USGS, operated a program of uranium exploration on the Colorado Plateau and several other western states. Ex. 25 at 14. The program involved temporary withdrawal of some 700 square miles of public domain land for exploration, geologic studies, drilling, examination of samples, and airborne reconnaissance. Id. The AEC employed a contractor, Walker Lybarger, to use a bulldozer to uncover any uranium outcrops that were discovered. Chenoweth Depo. Jan. 15, 2014, at 103.[5] Ore found on AEC land was leased to private parties directly through the AEC in return for a royalty on ore production. Ex. 25 at 14; see also Chenoweth Depo. Jan. 15, 2014, at 79-82. The AEC also undertook an access road program under which the AEC, the Bureau of Public Roads, and various state agencies improved over 1, 200 miles of roads in Arizona and other states to facilitate uranium exploration and mine development. Ex. 25 at 15.

         In July 1952, Charles Steen, an independent prospector, found uranium on the Colorado Plateau south of Moab, Utah. See Tr. at 56-57, 1600. Steen made over a million dollars on the ore deposit, and his success motivated many others to pursue uranium mining, launching a gold-rush-like interest in prospecting for uranium. Tr. at 57.

         C. Uranium Mining on the Navajo Reservation.

         Because the 19 Mine Sites are all located on the Navajo Reservation, both the Navajo Nation and the federal government were involved in transactions affecting the sites. Generally, four permits or leases are required for uranium mining: (1) prospecting permits, (2) drilling and exploration permits, (3) mining permits, and (4) mining leases. See Ex. 31 at 10. As of 1951, the Navajo Nation did not require a separate drilling and exploration permit (Ex. 1075) and required only non-Navajos to apply for prospecting permits (Ex. 31 at 10). In 1953, the Nation's mining regulations were updated to require drilling and exploration permits. Ex. 1078. The new regulations also required any prospector, Navajo or non-Navajo, to apply for a prospecting permit. Id. at 2. A non-Navajo permit holder could negotiate a mining lease with a tribal advisory committee. Id.

         Permits were approved by the Navajo Tribal Council and the area director of the BIA. See Tr. at 160-61; see, e.g., Ex. 294A. All rents and royalties were paid to the United States Treasury for deposit exclusively in Navajo tribal funds. See Tr. at 203, 523. The permits contained provisions related to the trust oversight responsibilities of the DOI and required permittees to (1) “conform to any and all regulations of the Secretary of the Interior”; (2) receive approval from the Tribal Council and the Secretary of the Interior before assigning the permit; and (3) allow inspection of permitted premises and operations by BIA personnel. Ex. 294A at 3-4. These provisions and the DOI oversight of the leases were consistent with the DOI's trust duties over all reservation mining. See Tr. at 162-63, 90 (the lease authorization requirement is consistent with all mining contracts on the Navajo reservation); Ex. 75 (example of a lease rejected by the BIA consistent with its tribal trust duty); Ex. 13 (delegating approval of leases to the Secretary of the Interior because it was in a better position to make profitable lease arrangements for tribes); see also Navajo Tribe of Indians v. United States, 9 Ct. Cl. 227, 232 (1985) (noting that the United States has a responsibility to supervise the affairs of Indian tribes). The Navajo Nation exercised independent decision-making authority and had a strong interest in developing uranium resources on tribal lands, and that the United States supported the Nation's efforts consistent with its role as tribal trustee. Tr. at 893-95, 899-904, 941-42, 988-89.

         D. The Mine Sites.

         In 1952, Charles Huskon, a Navajo prospector who worked for AEC contractor Walker Lybarger, discovered a natural uranium outcrop that would later become Huskon 1. Ex. 28 at 6. In July 1952, Huskon and his son left the contractor to work for Arrowhead. Id. In August and September, 1952, Huskon received mining permits for Huskon 1, 2, 3, 4, 5, 6, 7, and 8, and assigned them to Arrowhead. Ex. 294D. In Apr. 1953, the BIA approved a mining permit for Huskon 9, 10, and 11, which Huskon also assigned to Arrowhead. Ex. 24 at 53. Huskon 12, 14, and 17 were surveyed and located in December 1953 and January 1954 (Tr. at 525-27; Ex. 1023), but permits were not obtained until March 1954 (Ex. 294D).

         Rare Metals acquired Arrowhead in December 1954 and took over all of its uranium mining operations. See Exs. 1040-44. In 1955, mining permits for Ramco 20, 21, and 22 were issued to Navajo prospectors and assigned to Rare Metals. Ex. 294D. These sites were converted to mining leases in 1959. Id. Ramco 24 was permitted by a Navajo prospector in 1957 and assigned to Rare Metals. Id.

         In 1959, Rare Metals allowed Cameron Mining Company, an independent contractor, to perform mining operations at sites where Rare Metals had ceased operations. Doc. 159 at 8; Tr. at 499-500. These included Huskon 1, 2, 3, 6, 10, 11, 12, and 17, and Ramco 20, 21, and 22. Exs. 28 at 13; 1165; 1166; Prince Depo. Oct. 9, 1996, at 88-89. Rare Metals relinquished its rights to Ramco 24 in 1958, and its rights to the remaining Mine Sites during the first half of the 1960s. See Ex. 294D.

         E. Three Mining Phases.

         At trial and in their briefs, the parties focused on three phases of mine operations: exploration, mining, and reclamation. The Court makes the following findings of fact with respect to each phase.

         1. Exploration.

         During exploration, an ore deposit is located through prospecting, confirmed, and uncovered to determine its “dimension, grade, and continuity.” Tr. at 216. Common exploration methods in the 1950s included drilling and rim stripping. Tr. at 282. El Paso concedes that there is no evidence the United States ever conducted exploration activities at the Ramco sites (Tr. at 62), and El Paso does not seek contribution for exploratory drilling that occurred at any of the Huskon mines (Tr. at 17). During trial, El Paso also stated that it would assume responsibility for all exploration activities at Huskon 5, 6, and 9. Tr. at 348-49. This order, therefore, focuses on exploration at Huskon 1, 2, 3, 4, 7, 8, 10, 11, 12, 14, and 17. El Paso claims that the United States engaged in rim stripping at each of these sites. The United States disagrees.

         Rim stripping occurs when a bulldozer excavates soil, referred to as “overburden, ” from the top of an ore deposit to expose the mineralized zone. See Tr. at 350. During a 45-day period between December 19, 1953 and February 3, 1954, the AEC conducted rim stripping in the Cameron area. Exs. 58; 91 at 2; 129 at 20; 1258. According to a report prepared in 1955 by David Hinckley, an AEC geologist (the “Hinckley Report”), the AEC stripped approximately 45, 000 linear feet of soil in the Cameron area during this 45-day window, exposing portions of 15 uranium outcrops. Ex. 129 at 20.

         Exploratory trenches made during rim stripping can still be seen at many of the Mine Sites today. Some of the trenches are visible in aerial photographs of the sites taken in 1954, and even more are apparent in aerial photographs taken in 1992. The question is who made the trenches.

         AEC and its contractors used a Caterpillar D7 bulldozer for rim stripping - an 11-ton machine that cut a 29-foot-wide swath with its front blade. See Tr. at 330-31; Ex. 129 at 20. Arrowhead did not own a machine of this size, but instead used a much smaller Allis Chalmers HD5 front-end loader for work at the Mine Sites. See Tr. at 320-22, 441; see also Maloney Depo. at 117. After it purchased Arrowhead in December 1954, Rare Metals also used D7 bulldozers, as well as larger D8s, for work at the Huskon Mine Sites. See Tr. at 542, 551 (Mr. Beahm testifying that there is no dispute that Rare Metals bulldozers were used at the Huskon mines), 1306 (1992 aerial photos suggest that more rim stripping occurred after 1954); Exs. 130 at 6; 1160 (1957 contract with Rare Metals for contractor stripping of overburden); see also Chenoweth Depo. Apr. 24, 2014, at 26 (more exploration by private parties after 1956 than by the AEC before 1956).

         El Paso's mining expert, Douglas Beahm, reviewed historical documents regarding the DUPP and historical aerial photographs. Tr. at 311. He visited the Mine Sites six times. Id. On the basis of his investigation, Mr. Beahm testified that the AEC performed rim stripping at Huskon 1-12, 14, and 17. Tr. at 349.[6] He testified to measuring a total of 30.2 acres (or 45, 362 linear feet) of exploration disturbance at these Huskon sites. Tr. at 358-59. He noted that trenches he observed generally were 29-feet wide, corresponding to the size of a D7 blade, and that his estimated 45, 362 linear feet of trenching aligns with the 45, 000 linear feet of AEC rim stripping described in the 1955 Hinckley Report - rim stripping performed by the AEC during the 45-day window in 1953 and 1954. Tr. at 358; see also Ex. 129 at 20. Mr. Beahm concludes that all of the AEC's rim stripping in the Cameron area was performed at the Huskon Mine Sites, and constitutes the only rim stripping that occurred at those sites. El Paso also presented an undated internal corporate memorandum which stated that the AEC bulldozed trenches on Huskon 1-11, 12, 14, and 17, and that the company did “[l]ittle bulldozer work . . . except to strip off overburden.” Ex. 119; see also Tr. at 366-67.[7]

         If Mr. Beahm is correct in his conclusion that some 45, 000 feet of trenching was done by the AEC at the Mines Sites during the 45-day period described by Hinkley, the trenching would have occurred before the 1954 aerial photos were taken in February 1954 and presumably would be visible in those photos. But the government's aerial photography expert, Mary Sitton, testified that only 13, 589 linear feet of rim stripping can be seen within the Mine Sites' boundaries in the 1954 aerial photographs, with approximately 3, 000 linear feet outside of the boundaries. See Tr. at 1116.[8] She identified many trenches visible at the sites today that cannot be seen in the 1954 aerial photographs. She also noted that the 1955 Hinckley Report attributes the 45, 000 linear feet of rim stripping not to the Mine Sites specifically, but to the general Cameron area, which includes scores of mine sites, and that Rare Metals had heavy bulldozers at the Mine Sites in early 1955 and thereafter - machines capable of creating the trenches observed on the ground today. This evidence persuasively suggests that the trenches at Huskon 1-12, 14, and 17 were not all made by the AEC during a single 45-day period in late 1953 and early 1954.

         The Court finds Ms. Sitton's testimony about the aerial photographs to be more credible than Mr. Beahm's. She has significantly more aerial photography training and expertise than he does, and she obtained aerial photographs from the National Archives and Records Administration, the USGS, and the University of Arizona. Tr. at 1075. Unlike Mr. Beahm, she reviewed the historical aerial photos through a stereoscope, which allowed her to examine them in 3D. Tr. at 1076. The Court does not find credible Mr. Beahm's assertion that virtually all of the trenches seen on the ground today were present in 1954 but do not appear in the 1954 aerial photographs because they were obscured by shadows or lack of contrast.

         The evidence also shows that Arrowhead conducted rim stripping. Mr. Beahm testified that Arrowhead was unable to rim strip by bulldozer because it owned only the HD5 front-end loader, which was incapable of creating the wide trenches observed at the 19 Mine Sites. See Tr. at 320-22, 441; see also Maloney Depo. at 117. And records do indicate that Arrowhead was primarily a hand-digging operation before it was acquired by Rare Metals. See Tr. at 323. Further, Dozing with an HD5 front-end loader would require multiple passes to create a trench as wide as a D7's, would create several separate waste piles, and would not create uniform windrows as observed on the side of trenches at the Mine Sites.[9] But the United States presented evidence that Arrowhead did conduct rim stripping with its HD5 at some of the Mine Sites. Arrowhead cofounder George Morehouse stated that he would “strip down with the dozer, actually [he would use] the front end loader as a dozer.” See Ex. 69 at 9; see also Tr. at 1196-97. Expense and production reports for the Huskon sites, before the 45-day AEC exploration window, also indicate that rim stripping was performed by Arrowhead at the Huskon sites. See Ex. 1139 (report for Huskon 1 for October 24, 1952 to March 31, 1953, stating cubic yards for stripping); 1106 at 6 (indicating that overburden was stripped by an ACD5, which is the Allis Chalmers HD5 dozer); see also Tr. at 1199.

         Based on all the evidence, the Court makes several findings regarding the parties' involvement in the exploration phase.

         First, El Paso was directly involved in exploration. It has assumed responsibility for all exploration activities at the Ramco sites and Huskon 5, 6, and 9, as well as all exploratory drilling. The evidence described above shows that Arrowhead engaged in rim stripping, and Arrowhead had mining permits at Huskon 1-11 before February 1954. See Ex. 294D. The parties agree that Arrowhead had the authority to mine or explore as a result of those permits. See Tr. at 1623. In fact, Arrowhead delivered its first uranium ore shipment from Huskon 1 in October 1952, well before the 45-day window when the United States conducted rim stripping activities in the Cameron area. See Ex. 28 at 7-8. The Court finds it likely that the rim stripping at Huskon 1-11 was conducted by Arrowhead in conjunction with its mining activities. See Tr. at 1099 (noting that exploration and mining occurred at the same time), 1228 (stripping is done at the mines after mining started).[10]

         Second, the Court finds by a preponderance of the evidence that the United States engaged in exploration activities at Huskon 12, 14, and 17. Arrowhead did not receive a permit to mine these sites until March 1954, and yet Ms. Sitton and Mr. Beahm each found disturbances on these sites in the 1954 aerial photos that predate the permits. See Ex. 294D. For Huskon 14 and 17, Ms. Sitton noted several linear excavations on the 1954 aerials. See Exs. 1354; 1356.

         El Paso asserts that Arrowhead could not have created these disturbances without a mining permit. See Tr. at 1623. Prior to approval of the survey of the mining claims, Arrowhead had no privileges at Huskon 12, 14, and 17. See Tr. at 369. El Paso argues that the United States did have permission from the Navajo Nation to prospect and explore on the lands in question before the February 1954 aerials were taken. Tr. at 341-43; Exs. 58; 1258. The United States appears to argue that because Arrowhead had a prospecting permit, and because it surveyed and plotted Huskon 12, 14, and 17 in December of 1953 and January 1954, Arrowhead had authority to conduct exploration activities on those Sites. See Tr. at 1621. The United States asserts that because the Navajo Nation did not utilize exploration and drilling permits at the time, the prospecting permit gave Arrowhead authority to conduct these exploration activities. See Tr. at 1623. Further, the United States argues that the minimal level of activity identified by Ms. Sitton would be consistent with staking a mine claim. Tr. at 1622.

         As already noted, the Navajo Nation initially did not require exploration or drilling permits. Tr. at 896, 1255; Exs. 1075; 1078. Miners applied for a prospecting permit and then for a mining permit. Ex. 1075. In December 1953, the Nation updated its regulations, requiring miners to seek first a prospecting permit, then an exploration permit, and then a mining permit. Tr. at 896; Ex. 1078. Mr. Beahm testified that the mining permit was necessary for miners to conduct exploration activities like those seen clearly at Huskon 14 and 17, and that likely occurred at Huskon 12 (Tr. at 117), and the United States failed to present any testimony that supports its theory that a prospecting permit prior to 1953 would allow Arrowhead to conduct exploration.[11] Moreover, the fact that the disturbances in question were labeled as linear excavations or seemed to be made by heavy equipment indicates that these disturbances were not made in the normal course of staking a claim. See Trial Tr at 1176 (only use a simple compass and steel chain for staking claims). Because the trenches and disturbances at Huskon 12, 14, and 17 were made at a time when Arrowhead likely did not have authority to do the work, and were made by heavy equipment of the kind operated by the AEC contractor, the Court finds by a preponderance of the evidence that the United States conducted rim stripping at these sites.

         Third, the Court does not find, as El Paso suggests, that the AEC conducted most of the exploration activities at the Mine Sites. Mr. Beahm relied heavily on current site visits where he assumed that bulldozer-sized trenches visible on the ground were made by the AEC during the 45-day window in late 1953 and early 1954. But this view disregards the fact that the disturbances could have been made at any time during the years of mining by El Paso, including after 1954 when Rare Metals brought its own D7 and D8 bulldozers to the Mine Sites. See Tr. at 390; Ex. 1158. Mr. Beahm also relied on historical documents noting that the AEC conducted rim stripping in the Cameron area, but these documents refer to the entire Cameron area, which contained approximately 100 mines. Tr. at 1147 (Ms. Sitton testifying that she noted other activity in the Cameron area), 1112-14 (discussing mapping anomalies that included linear excavations in the Cameron area outside the Mine Sites), 1114-15 (Ms. Sitton testifying that the 45, 000 linear feet does not cover just the 19 Mine Sites); see also Ex. 1363. And Mr. Beahm's assertion that he measured approximately 45, 000 linear feet of trenching, which matched the Hinckley Report on AEC activity, is less credible than Ms. Sitton's testimony that most of this trenching does not appear in the 1954 aerial photographs.

         In summary, although the Court finds that both El Paso and the United States engaged in exploration activities at the Mine Sites, the Court does not find that all or even a majority of it was performed by the United States. The evidence does not enable the Court to precisely determine the parties' respective exploration activities at the sites, but this is not an impediment to an overall allocation because the exploration phase is a relatively minor portion of the relevant activity in this case.

         2. Mining.

         All of the Mine Sites were open pit mines. Tr. at 1611. They were mined either by El Paso or one of the orphan companies. The United States never mined or supervised mining operations at any of the sites. See Tr. at 908, 1580; Ex. 69 at 4-5; Chenoweth Depo. Jan. 16, 2014, at 409; Chenoweth Depo. Apr. 24, 2014, at 23, 57.[12]

         The Navajo Nation managed uranium mining on the reservation. Tr. at 941-42; Chenoweth Depo. Jan. 16, 2014, at 408-09. The Nation wrote its own regulations, established a department of mining, conducted mining inspections, and hired a mining engineer. Tr. 893-95; Exs. 31 at 8; 62; 1074; 1080. The United States did conduct inspections through the DOI and the Bureau of Mines (“BOM”) to promote mine safety and identify hazards. See, e.g., Exs. 1189-1202; 1207-08; Chenoweth Depo. Jan. 16, 2014, at 409.

         Initially, Arrowhead mined with picks, shovels, wheel barrows, the HD5 loader, and a crew of about twelve workers. See Ex. 69 at 10. El Paso's proposed findings of fact admit that Arrowhead produced almost 4, 000 tons of ore in 1953 and more than 8, 000 tons in 1954. See Doc. 158 ¶ 167. When Rare Metals acquired Arrowhead in December 1954, production at the mines increased significantly. See Doc. 158 ¶ 167; Ex. 1334. In 1956, Rare Metals Mines produced nearly 30, 000 tons of ore. See Doc. 158 ¶ 167. In 1957, the Mines Sites produced over 40, 000 tons. Doc. 158 ¶ 167. As of March 1956, an internal company memo stated that Rare Metals had stripped 291, 169 tons of native material at the Huskon sites and another 273, 857 tons of overburden at the Ramco sites. Ex. 1135.

         Open pit mines are created by stripping away large amounts of overburden and then removing the ore to an onsite stockpile. See Exs. 1190-1210 (safety inspection reports documenting mining methods). El Paso's excavations at the Mine Sites ranged in size from shallow trenches to large pits up to 2, 400 feet long. Exs. 28 at 5; 1190-1210; see also Tr. at 1202. Mine development also included roadbuilding. See Exs. 1336 (summarizing miles of road built at each site based on El Paso expense and production reports); 1389 ¶ 17. A majority of the Cameron area waste-generating activity occurred between 1954 and 1961. See Exs. 28 at 19; 1334.

         El Paso disposed of hazardous substances at each of the Mine Sites. See Doc. 117 ¶ 3. The United States did not direct waste handling or waste disposal. See Tr. at 907, 921, 1204; Chenoweth Depo. Jan. 16, 2014, at 410. During mining, workers used a Geiger counter to asses wheelbarrow loads of ore and, if a load did not “measure so much on the Geiger counter, they'd dump it over the hill [] someplace.” Chenoweth Depo. Jan. 16, 2014, at 410-11. Waste rock was dumped out of the way so it would not interfere with mining. Chenoweth Depo. Jan. 16, 2014, at 411; see also Ex. 69 at 10 (Arrowhead put waste wherever it was convenient).

         The AEC bought uranium at the prices and bonuses set by the Circulars. Because miners could grade their uranium on an average monthly basis, they had an incentive to stockpile lower-grade ore and blend it with higher-grade ore to sell to the AEC. Chenoweth Depo. Apr. 24, 2014, at 36. This was a common practice. See Tr. at 1610; Ex. 15 at 3; Chenoweth Depo. Apr. 24, 2014, at 36-37.

         When El Paso opened the Tuba City mill in 1956, it set an ore grade cut-off of .20% because that was more efficient for the mill's operation. Ex. 280; Chenoweth Depo. Apr. 24, 2014, at 163-64 (the ore grade cut-off was up to the mill, if the mill did not want to take the lower grade the AEC did not force them); see also Exs. 1231-32 (mining companies complaining that El Paso was not purchasing lower grade ore as permitted by the Circulars). Even before the mill changed the cut-off, miners were more focused on higher-grade uranium because it sold for a higher price. Chenoweth Depo. Apr. 24, 2014, at 37 (most miners could not make money at the .10% cut-off, so during the uranium boom the average grade was about .23%).

         By late 1957, dramatic increases in reported uranium ore reserves and in milling capacity prompted the AEC to announce that “it no longer [was] in the interest of the Government to expand production of uranium concentrate.” Ex. 25 at 12. The AEC announced that it would buy “only appropriate quantities of concentrate derived from ore reserves developed prior to November 24, 1958.” Id. In 1958, the AEC announced that “domestic producers of uranium ores and concentrate” could start making private sales for the peaceful use of atomic energy, but no such sales were actually made until 1966. Id.

         In 1962, the AEC implemented a “stretch-out” program which allowed mining companies to defer delivery of a portion of their contract commitments until 1967 and 1968, in return for an AEC commitment to purchase the ore in 1969 and 1970. Id. Operations at the Mine Sites phased down as incentives decreased, but there is also evidence that ore reserves at the Mine Sites were exhausted by this time and no longer held enough economically viable uranium. Chenoweth Depo. Jan. 16, 2014, at 410-14 (describing the process of using the Geiger counter to measure uranium from a mine; once it was very low, mining would stop); see also Ex. 31 at 7 (“[A]s the known orebodies were depleted, ore production declined sharply after 1958.”).

         At the end of a mining lease, there was an inspection to ensure that sites were free from physical hazards. See Tr. at 154; Ex. 1214; see also Chenoweth Depo. Apr. 24, 2014, at 182. Open pits were left unfilled. See Prince Depo. Oct. 9, 1996, at 131. Language in the leases and the customs of the day were to leave mines “timbered, ” which meant leaving the ore body accessible and, in the case of open pit mines, leaving the pit open. See Tr. at 154, 1613 (timbered means the structural integrity of the pit walls).[13]

         Language in the mine leases also stated that mines were to be surrendered and returned in good condition except for ordinary wear and tear. See Tr. at 1576. El Paso's expert, Mr. Dempsey, testified that this provision did not affect the expectation that mine pits would be left open. See Tr. at 1577; see also Prince Depo. Oct. 9, 1996, at 114. By 1962, El Paso and its subcontractors stopped all mining at the 19 Mine Sites. Prince Depo. Oct. 9, 1996, at 68-69.

         3. Reclamation.

         For almost three decades, the Mine Sites remained largely in the same condition as when mining ceased, with open pits and waste piles on the properties. In the 1980s, the Navajo Nation became concerned about possible health impacts of abandoned uranium mines on the Reservation. Ex. 1275; Prince Depo. Oct. 30, 1996, at 220-21. People were frequenting the pits for recreational purposes, and livestock was watering at the pits. Prince Depo. Oct. 30, 1996, at 221-22. As a result, in the early 1990s the Navajo Nation undertook reclamation of 17 of the 19 Mine Sites. Reclamation was not deemed necessary at Huskon 5 and 14. Doc. 159 at 9.

         Funding for the reclamation was provided through grants from the federal government's Office of Surface Mining (“OSM”) under the Surface Mining Control and Reclamation Act (“SMCRA”). Doc. 159 at 9. The Nation's office of Navajo Abandoned Mine Lands (“NAML”) developed the plans for reclaiming the mines and submitted grant applications to the OSM. Martinez Depo. at 20-21. The OSM reviewed the applications prior to approving funding. See id. The OSM was deferential to the Nation in its review and oversight of the reclamation because of the Nation's status as a sovereign nation. Sassaman Depo. at 126-31. The OSM's role was to oversee the sites for compliance with the NAML plans and to offer advice when necessary. Martinez Depo. 34-36, 40-43; Sassaman Depo. 33-35, 106. All reclamation standards were established by the NAML. Martinez Depo. at 34-35; Sassaman Depo. at 29-30, 35, 56, 74-76.

         Through five reclamation projects, the NAML (1) restored hundreds of acres of land, (2) backfilled and graded seventeen uranium mine pits formerly operated by El Paso, (3) removed or reduced the slopes of thousands of feet of dangerous highwalls and embankments, (4) contained mining waste underground to prevent erosion and reduce surface exposure, (5) built drainages structures to divert runoff from the pits and waste piles, (6) removed ponds of polluted water that were sometimes used for recreational and agricultural purposes, and (7) provided replacement ponds for livestock and wildlife. See Exs. 1279-85 (NAML technical specifications); 1310 (Project three update report); Prince Depo. Oct. 30, 1996, at 261-62. The United States provided the Nation with $2.4 million in funding for this work. See Exs. 1294-1308 (total costs by each site).

         F. The Tuba City Mill.

         The Tuba City uranium mill was built and operated by El Paso, and purchased ore from Cameron-area mines, including the Mine Sites. The mill is not part of the EPA's current CERCLA directive to El Paso, and the parties disagree on whether its remediation is relevant to the Court's equitable allocation for the 19 Mine Sites at issue in this case.

         Originally, Arrowhead and Rare Metals shipped ore to the AEC's Bluewater mill in New Mexico. Exs. 1222; 1162; 1163; 1243. In 1954, Rare Metals contacted the AEC about establishing a mill in the vicinity of the Mine Sites, which would significantly reduce haulage costs. Tr. at 1008; Ex. 107. Rare Metals and the AEC agreed that the AEC would operate an ore-buying station in Tuba City until Rare Metals could finish building the mill, and Rare Metals would then take over the ore-buying function. Exs. 1030 at 5; 1222; 1224. In July 1956, Rare Metals completed construction of the mill and began purchasing ore from mines in the area. Exs. 1241; 1235. The mill operated from 1956 to 1966 and produced 80, 000 tons of yellow cake uranium for the United States. Ex. 1072 at 25.

         In the Circulars, the AEC offered to purchase uranium ore above a .10% grade. The Tuba City mill adopted a stricter standard, requiring a grade of .20% on a monthly average basis. Exs. 131; 280; 1040; 1226 at 2.

         The Tuba City mill generated its own waste pile in the form of “tailings, ” which consisted of low-level radioactive sand generated from processing uranium ore. Ex. 1317 at 8; Prince Depo. Dec. 1, 2016, at 43-44. El Paso also disposed of liquid wastes from ore processing in an impoundment pond constructed near the mill. Exs. 1317 at 101; 1319 at 5. These operations contaminated groundwater at the site. Tr. at 1262.

         El Paso stopped operation of the Tuba City mill in 1966 because uranium sources in the area were exhausted. See Ex. 1240 at 2. The Arizona Atomic Energy Commission (“Arizona AEC”) oversaw the termination of El Paso's mill license. El Paso was required to stabilize the tailings pile (Ex. 1242), and consulted with the federal BOM to develop a stabilization plan (Ex. 176; Caulkins Depo. at 20-22).[14] El Paso's plan was submitted to and approved by the Arizona AEC, the United States Public Health Service, and the Navajo Minerals Resource Office. See Ex. 173. El Paso implemented the plan, and the Arizona AEC terminated El Paso's license, acknowledging that El Paso “effectively decontaminated the mill building, ” “stabilized the tailings pile against wind erosion, ” and “fenced and posted the tailings pile.” Ex. 177; see also Tr. at 1252; Ex. 176.

         Eventually, the United States remediated the mill site under the Uranium Mill Tailings Radiation Control Act (“UMTRCA”). Ex. 1317 at 5, 18-20; 42 U.S.C. § 7901(a). In UMTRCA, Congress acknowledged that uranium tailings at active and inactive mill sites may pose a significant radiation health hazard to the public. See § 7901(a). UMTRCA was designed to “stabilize and control [mill] tailings in a safe and environmentally sound manner and to minimize or eliminate radiation hazards to the public.” § 7901(b). In effect, the federal government assumed responsibility for the clean-up of uranium-producing mills for the good of the country. Tr. at 1243. Where clean-up occurs on Indian lands, as at the Tuba City mill, the government pays all costs. Ex. 1317 at 9.

         The Tuba City mill remediation occurred in two phases from January 1985 to Apr. 1990. Ex. 1317 at 19. Through the end of 2018, the United States has spent $34, 143, 000 in surface remedial action costs and $59, 426, 656 in groundwater remedial action costs, for a total of more than $93, 500, 000. See Ex. 1321. The monitoring process will continue into perpetuity (Ex. 1320 at 7), with the United States' future response costs projected to reach $37, 288, 757 (Ex. 1321).

         G. The EPA and Remediation of the 19 Mine Sites.

         When the EPA identifies an abandoned uranium mine that contains a hazardous substance, it requests that a potentially responsible party (“PRP”) conduct a Remedial Site Evaluation (“RSE”). See 42 U.S.C. §§ 9606, 9607; 40 C.F.R. § 400.15. The RSE investigates the nature and extent of contamination and associated risks. See 40 C.F.R. § 400.20. It includes determining the background levels of radiation due to naturally occurring uranium. Stavinoha Depo. at 64-65. In Cameron, background levels vary dramatically from place to place and even within a particular site. Id. at 97. After an RSE, the PRP prepares an Engineering Evaluation/Cost Analysis (“EE/CA”), which evaluates potential response actions. Doc. 159 at 10; Tr. at 641.

         In May 2012, the EPA sent El Paso a “general notice” letter identifying El Paso as a PRP for the Mine Sites. Doc. 159 at 8; Stavinoha Depo. at 29. In 2013, El Paso signed an administrative order of consent (“AOC”) to perform a “limited” investigation. Ex. 263; Stavinoha Depo. at 53-54. El Paso agreed to conduct gamma screening to determine the lateral extent of disturbed areas within a portion of the 19 Mine Sites. See Ex. 263 at 33-34. El Paso submitted a number of work plans related to background levels and gamma scanning (Tr. at 610), and has not missed a deadline with the EPA (Tr. at 610-11).

         In 2017, El Paso agreed to conduct RSEs at Huskon 12 and 14, modifying the original AOC. See Tr. at 613. In 2018, El Paso entered a second AOC amendment to perform EE/CAs at Huskon 12 and 14. See Tr. at 613-14. El Paso also submitted a draft for a third modification to perform RSEs for the remaining 17 Mine Sites. Tr. at 614. To date, El Paso has performed draft RSEs for Huskon 12 and 14. See Ex. 1325. El Paso has also prepared a draft EE/CA for both sites. See Ex. 285. The EPA has not yet provided comments on these drafts. See Tr. at 630. The EPA has not selected a final remedy for Huskon 12 and 14, and El Paso has not agreed to perform a remedy. Tr. at 666.

         H. Costs at Issue in this Order.

         For purposes of the actual response costs to be allocated in this order, the parties have agreed to a cut-off date of August 1, 2016. El Paso alleges that it has incurred recoverable response costs at the Mine Sites totaling $1, 393, 448 through August 2016, and has paid another $502, 500 to the United States to reimburse certain EPA response costs. See Doc. 159 at 13. The United States does not dispute these amounts ...

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