Joshua Belcher

November 8, 2006

The Tenth Circuit Court of Appeals affirmed a grant of summary judgment against New Mexico's claim seeking an unrestricted award of money damages, holding that the Comprehensive Environmental Response, Compensation, and Liability Act's (CERCLA) comprehensive natural resources damages scheme (NRD) preempted such an award "as an obstacle to the accomplishment of congressional objectives as encompassed in CERCLA." Using private attorneys working on contingency, this case represents a failed attempt by the State to overcome the historically prohibitive expense that trustee case development entails in NRD actions. The suit, supported by 13 other states, would have been the largest award for environmental damages in New Mexico history.

The State brought suit against the defendants, General Electric and ACF Industries, alleging groundwater contamination and seeking recovery of damages of up to 4 billion under state-based theories of trespass, public nuisance, and negligence. Substantial groundwater contamination had occurred in Albuquerque's South Valley, polluting an area of one square mile, including one of the city's twenty-five well fields. From 1951 to 1967, ACF was involved in the production of nuclear weaponry on the site. Before it bought the property in 1983, GE operated a plant on the site for 16 years, manufacturing aircraft engines for the government.

Rejecting the State's claim, the Circuit Court noted EPA's ongoing involvement in a comprehensive program for long-term remediation, and observed that CERCLA's natural resources damages scheme allowed the State to bring an action to hold defendants jointly and severally liable for all removal and/or remedial action costs, as well as "damages for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction, or loss . . . ." Insofar as the State seeks to apply these damages to something other than remediation, the court held, CERCLA prohibits that use.

For additional information:

Ben Neary, Judge Dismisses Water Pollution Lawsuit, Santa Fe New Mexican, May 13, 2004, at B-1.

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9607(a)(4)(C) (2000).

Court Upholds Dismissal of Water Case, Hous. Chron., Nov. 1, 2006, http://www.chron.com/disp/story.mpl/ap/fn/4303060.html.

James A. Chalmers & Suzanne M. Stuckwisch, Recent Developments in Natural Resource Damage Claims: Smoke or Fire?, 15 Envtl. Compliance & Litig. Strategy 1 (2000).

Michael L. Rodburg & Timothy L. Borkowski, New Mexico V. General Electric: A Cautionary Tale, 176 N.J.L.J. 720

(2004).

New Mexico v. General Eletric. Co., No. 04-2191, 2006 WL 3072590 (10th Cir. Oct. 31, 2006).