Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_08-cv-02556/USCOURTS-caed-2_08-cv-02556-33/pdf.json

Nature of Suit Code: 893
Nature of Suit: Environmental Matters
Cause of Action: 42:6901 Environmental Cleanup Expenses

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UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF CALIFORNIA 

UNITED STATES OF AMERICA, 

and CALIFORNIA DEPARTMENT 

OF TOXIC SUBSTANCES CONTROL, 

Plaintiffs, 

v. 

STERLING CENTRECORP INC., 

STEPHEN P. ELDER and ELDER 

DEVELOPMENT, INC., 

Defendants. 

No. 2:08-cv–02556-MCE-JFM 

MEMORANDUM AND ORDER 

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, filed pursuant to the Comprehensive Environmental 

Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601, et seq. 

(“CERCLA”), seeks contribution for the costs of those activities both from former owners 

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of the site and operators responsible for its mining. After bifurcating the case between 

liability and damages, a bench trial as to the liability of Defendant Sterling Centrecorp 

Inc. (“Sterling”) was held over four days between October 31, 2012, and November 7, 

2012. Those proceedings resulted in Findings of Fact and Conclusions of Law filed 

June 20, 2013, and June 24, 2013, that found Sterling liable for all proper removal and 

remedial costs incurred by Plaintiffs at the Mine. ECF Nos. 211, 213.1 

Presently before the Court are two related motions for summary judgment 

pertaining to the second damages phase of this case. First, Defendant Sterling 

Centrecorp Inc. (“Sterling”) moves for partial summary judgment as to the issue of 

operator liability, alleging that the government was an operator of the Lava Cap Mine 

Superfund Site after it issued, in 1943, an order closing the Mine during World War II 

pursuant to War Production Board Limitation Order L-208 (“Order L-208”). The 

government, in turn, has filed its own request for summary judgment as to Sterling’s 

Counterclaim2

 that the government is liable to pay a portion of the response costs 

incurred in the Lava Cap Mine Superfund Site because it temporarily prohibited, through 

Order L-208, the mine from operating during the 1940’s so that national resources could 

be concentrated in industries that produced materials, like copper and zinc, that were 

necessary for the war effort. For the reasons set forth above, the Court finds that the 

government was not an “operator” of the Lava Cap Mine for CERCLA purposes because 

it closed the facility in accordance with Order L-208. Consequently, the government’s 

motion for summary judgment will be granted, and Sterling’s motion is denied.3

/// 

/// 

 1

 The liability of the remaining Defendants, Stephen P. Elder and Elder Development, had already 

been adjudicated by orders dated February 23, 2010, September 20, 2011, and December 8, 2011, (ECF 

Nos. 78, 149 and 153) respectively. 

2

 Citations to “Counterclaim” in this memorandum and order refer to Sterling’s counterclaim, as 

incorporated in its First Amended Answer filed August 25, 2009 (ECF No. 33). 

3

 Because it determined that oral argument would not have been of material assistance, the Court 

ordered both Motions submitted on the briefing in accordance with Eastern District Local Rule 230(g). 

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BACKGROUND 

The Lava Cap Mine Superfund Site is located on approximately thirty acres 

located in a rural residential area in the foothills of the Sierra Nevada Mountains. Gold 

and silver mining activities at the site began in approximately 1860. Between 1943 and 

1945 mining was conducted at the site by the Lava Cap Gold Mining Corporation 

(“LCGMC”). Mining operations resulted in two piles of mining waste, a waste rock pile 

and a mill tailings pile. Findings of Fact ¶¶ 34-35.4

 The waste rock pile, estimated to be 

several stories high, was situated immediately next to the mine and mill building. Id. at 

¶ 34. The fine-grained materials comprising the mill tailings were impounded 

downstream from the mill behind a timber dam on Little Clipper Creek. Id. at ¶¶ 12, 35. 

In 1938, LCGMC created another dam on Greenhorn Creek to also trap mill tailings, 

thereby creating Lost Lake. Id. at ¶ 13. 

In 1941, shortly after World War II began, the government took steps to address a 

shortage of nonferrous metals along with the machines and supplies necessary to 

produce those metals. On January 16, 1942, President Roosevelt established the War 

Production Board, an entity tasked with the conversion of civilian industry to wartime 

production. The Board proceeded to issue a series of orders giving priority to copper 

mining. Gold mines were classified as nonessential and given the lowest priority rating. 

See United States v. Central Eureka Mining Co., 357 U.S. 155, 157 (1958). 

On October 8, 1942, the Board issued Order L-208, which, after a seven-day 

notice period, prohibited owners of non-essential mines from any action to “acquire, 

consume, or use any material, facility, or equipment to break any new ore or to proceed 

with any development work or any new operations in or about such mine.” Plaintiffs’ 

Statement of Undisputed Fact (“PUF”) No. 1. Order L-208 went on preclude owners of 

non-essential mines from removing, after sixty days, “any ore or waste from such mine, 

 4

 Citations to “Findings of Fact” refer to the Court’s Findings of Fact in the liability portion of this 

case, filed June 20, 2013. ECF No. 211. 

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either above or below ground, or [from] conduct[ing] any other operations in or about 

such mine, except to the minimum amount necessary to maintain its buildings, 

machinery, and equipment in repair, and its access and development workings safe and 

accessible.” Id. at No. 2. 

Although the Board did not originally invoke the provisions of Order L-208 and 

allowed operations at the Lava Cap Mine to continue, on May 12, 1943, the Board 

advised LCGMC that as of June 1, 1943, it would be subject to the requirements of the 

Order. Id. at Nos. 4-5. By July of 1943, LGMC had ceased extracting ore that had 

already broken down and had removed mine equipment. Id. at 7-8. 

A little over two years later, on June 30, 1945, the Board revoked Order L-208 

and thereby permitted the resumption of gold mining activities at mines that had 

previously been designated non-essential. Id. at No. 9. LCGMC nonetheless did not 

resume operations at the Lava Cap Mine, and in September of 1952, Defendant 

Sterling’s predecessor, New Goldvue Mines, Inc.,5 signed an agreement to acquire 

LCGMC’s assets, including the Lava Cap Mine, through its wholly owned subsidiary, 

Keystone Copper Corporation.6 Findings of Fact ¶¶ 24-27. Sterling therefore became 

LCGMC’s successor by de facto merger (Conclusions of Law ¶¶ 6, 58),7 and took no 

action at the mine site for decades. 

In 1979, a partial log dam collapse led to a release of mine tailings into Little 

Clipper Creek which, in turn, caused downstream neighbors to complain about pollution 

from the resulting silt. Findings of Fact ¶¶ 142-43, 166. In October of 1979, the Central 

Valley Regional Control Board and the California Department of Fish and Game 

investigated and found that arsenic contaminated tailings had entered Little Clipper 

 5

 New Goldvue changed its names several times over the years before becoming Sterling 

Centrecorp Inc. in 2001. New Goldvue and the subsequent names by which the corporation was known 

will be simply referred to as “Sterling” throughout the remainder of this Memorandum and Order unless 

otherwise noted. 

6

 Keystone was subsequently itself conveyed to New Goldvue. 

7

 Citations to “Conclusions of Law” refer to the Court’s Conclusions of Law with regard to Sterling’s 

liability in this case, filed June 24, 2013. ECF No. 213. 

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Creek and flowed downstream to Lost Lake. Id. at ¶ 142-43, 21. The Regional Water 

Quality Control Board thereafter issued a Cleanup and Abatement Order to Keystone, 

which technically held title to the mine at the time, on October 25, 1979. Id. at ¶ 144. 

Following an ultimately unsuccessful attempt to sell the Lava Cap Mine to another 

company, Keystone sold 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, in 1989. The remaining three parcels are owned by 

another Elder business interest, Defendant Elder Development, Inc. 

The United States Environmental Protection Agency (“EPA”) completed a 

Preliminary Assessment on the mine site in April of 1993, after Elder’s purchase of the 

mine site. Sediment and soil samples revealed elevated concentrations of both arsenic 

and lead. 

Heavy rainstorms in 1997 washed mine wastes downstream into Little Clipper 

Creek and Lost Lake. The upper half of the log dam thereafter collapsed, discharging 

an estimated 10,000 cubic yards of additional tailings contaminated with arsenic. 

Findings of Fact ¶ 21. In October of 1997, the U.S. Environmental Protection Agency 

(“EPA”) determined that the tailings release from the Mine met the National Contingency 

Plan (“NCP”) criteria for a removal action under 40 C.F.R. § 300.415(b)(2). During 1997 

and 1998, the EPA conducted a physical removal action at the Site. Pls.’ Compl., 

¶¶ 35-39. Thereafter, in January of 1999, the Site was officially designed a Superfund 

site in light of its potential risk to human health and the environment. 

 Removal operations included the removal and relocation of tailings, 

reinforcement of the log dam, and diversion of Little Clipper Creek around the tailings 

pile. Future remedial work contemplated by the EPA for the site will include actions to 

address the polluted groundwater. In September of 2004, the EPA issued a Record of 

Decision which selected its final remedy for the Mine Area Operable Unit. Phase One 

remedial work was completed in 2007. Work on the remedial design for so-called 

Phase 2, which involves treatment of the mine drainage continues. Additionally, in 

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September of 2008, the EPA issued an interim Record of Decision for the drinking water 

component of the groundwater operable unit. Finally, the EPA continues to develop a 

feasibility study for the Lost Lake Operable Unit. According to the government, through 

November 30, 2012, it incurred $32,205,011.39 in response costs at the Site. 

Additionally, the California Department of Toxic Substances Control (“DTSC”) has itself 

spent $847,912.116 in unreimbursed response costs through October 31, 2014, and 

expects that figure to increase in the future. 

On October 27, 2008, the United States and the DTSC commenced this civil 

action to recover both their past response costs under CERCLA and to obtain a 

declaratory judgment that Defendants are responsible for future response costs at the 

Site. Thereafter, on August 25, 2009, Sterling asserted a contribution counterclaim 

against the government alleging that the United States is liable under CERCLA as an 

owner and an operator of the Lava Cap Mine. According to the counterclaim that 

contention is premised on the Board’s issuance of Order L-208 “and its prohibition on the 

use of material or equipment to remove any waste or conduct any other operations in or 

about the Lava Cap Mine.” Counterclaim, ¶¶ 8, 14. Sterling accordingly requests a 

declaration that the United States is liable under the CERCLA along with an equitable 

apportionment of response costs under CERCLA Section 113 (f)(1), 42 U.S.C. 

§ 9613(f)(1). 

Sterling’s March 20, 2015, answers to the government’s contention interrogatories 

on this issue revealed that Sterling’s assertion of the United States as an “operator” was 

based on Sterling’s view that the United States was “controlling hazardous waste 

management decisions at the mine” during the period it was closed by Order L-2089 

between 1943 and 1945. PUF No. 12. Sterling goes on to assert that “the United States 

prevented the mine operator from securing the mine tailings in a manner that would have 

prevented erosion of tailings into Little Clipper Creek and the dispersal of mine tailings 

during the storm event that occurred on or about January 1, 1997. Id. At the same time, 

/// 

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Sterling withdrew its claim that the United States was an “owner” of the Lava Cap Mine 

during the period in question. 

STANDARD 

The Federal Rules of Civil Procedure provide for summary judgment when “the 

movant shows that there is no genuine dispute as to any material fact and the movant is 

entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also 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, 477 U.S. at 325. 

Rule 56 also allows a court to grant summary judgment on part of a claim or 

defense, known as partial summary judgment. See Fed. R. Civ. P. 56(a) (“A party may 

move for summary judgment, identifying each claim or defense—or 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). The standard that applies to a 

motion for partial summary judgment is the same as that which applies to a motion for 

summary judgment. See Fed. R. Civ. P. 56(a); State of Cal. ex rel. Cal. Dep’t of Toxic 

Substances Control v. Campbell, 138 F.3d 772, 780 (9th Cir. 1998) (applying summary 

judgment standard to motion for summary adjudication). 

In a summary judgment motion, the moving party always bears the initial 

responsibility of informing the court of the basis for the motion and identifying the 

portions in the record “which it believes demonstrate the absence of a genuine issue of 

material fact.” Celotex, 477 U.S. at 323. If the moving party meets its initial 

responsibility, the burden then shifts to the opposing party to establish that a genuine 

issue as to any material fact actually does exist. Matsushita Elec. Indus. Co. v. Zenith 

Radio Corp., 475 U.S. 574, 586-87 (1986); First Nat’l Bank v. Cities Serv. Co., 391 U.S. 

253, 288-89 (1968). 

/// 

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In attempting to establish the existence or non-existence of a genuine factual 

dispute, the party must support its assertion by “citing to particular parts of materials in 

the record, including depositions, documents, electronically stored information, 

affidavits[,] or declarations . . . or other materials; or showing that the materials cited do 

not establish the absence or presence of a genuine dispute, or that an adverse party 

cannot produce admissible evidence to support the fact.” Fed. R. Civ. P. 56(c)(1). The 

opposing party must demonstrate that the fact in contention is material, i.e., a fact that 

might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, 

Inc., 477 U.S. 242, 248, 251-52 (1986); Owens v. Local No. 169, Assoc. of W. Pulp and 

Paper Workers, 971 F.2d 347, 355 (9th Cir. 1987). The opposing party must also 

demonstrate that the dispute about a material fact “is ‘genuine,’ that is, if the evidence is 

such that a reasonable jury could return a verdict for the nonmoving party.” Anderson, 

477 U.S. at 248. In other words, the judge needs to answer the preliminary question 

before the evidence is left to the jury of “not whether there is literally no evidence, but 

whether there is any upon which a jury could properly proceed to find a verdict for the 

party producing it, upon whom the onus of proof is imposed.” Anderson, 477 U.S. at 251 

(quoting Improvement Co. v. Munson, 81 U.S. 442, 448 (1871)) (emphasis in original). 

As the Supreme Court explained, “[w]hen the moving party has carried its burden under 

Rule [56(a)], its opponent must do more than simply show that there is some 

metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586. Therefore, 

“[w]here the record taken as a whole could not lead a rational trier of fact to find for the 

nonmoving party, there is no ‘genuine issue for trial.’” Id. 87. 

In resolving a summary judgment motion, the evidence of the opposing party is to 

be believed, and all reasonable inferences that may be drawn from the facts placed 

before the court must be drawn in favor of the opposing party. Anderson, 477 U.S. at 

255. Nevertheless, inferences are not drawn out of the air, and it is the opposing party’s 

obligation to produce a factual predicate from which the inference may be drawn. 

/// 

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Richards v. Nielsen Freight Lines, 602 F. Supp. 1224, 1244-45 (E.D. Cal. 1985), aff’d, 

810 F.2d 898 (9th Cir. 1987). 

ANALYSIS 

Sterling’s contention that the government is liable for response costs at the Lava 

Cap Mine Site is based on an argument that the War Production Board’s temporary 

shutdown of the mine between 1943 and 1945 prevented Sterling’s predecessor, 

LCGMC, from properly securing mine tailings at the Site, and therefore give rise to 

operator liability on the government’s part under CERCLA. Sterling goes so far as to 

concede that this is the “sole issue for the Court to decide” in these motions. Sterling’s 

Reply, ECF No. 292, 1:2-5. 

Sterling argues that because The War Production Board shut the mine down 

during World War II, it “operated the mine exclusively for two years and controlled all 

decisions about the Mine.” Sterling Mot., ECF No. 272-1, 4:27-28. By that simple act of 

closure, according to Sterling, the government “controlled every decision relating to the 

activity of the mine, including preventing [LCGMC] from managing waste in any manner,” 

thereby dictating a finding of CERCLA operator liability. Id. at 7:1-3. Sterling makes this 

argument despite the fact that, as the government points out, the Board never had any 

presence at the mine and neither constructed any facilities or built any roadways to 

facilitate access to mining operations. Nor did the Board have any role in managing 

LCGMC, direct any aspect of the company affairs, provide raw materials, dictate 

production, or regulate profits at the mine. It was LCGMC alone that generated mining 

waste, including tailings, and determined how and where that waste would be disposed. 

It was also LCGMC and not the government who designed and constructed the disposal 

system such that tailings were discharged into Little Clipper Creek and flowed 

downstream where they were impounded. 

/// 

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Under CERCLA, a person or entity may be liable for response costs if “at the time 

of disposal of any hazardous substance [it] owned or operated any facility at which such 

hazardous substances were disposed of.” 42 U.S.C. § 9607(a)(2). The statute defines 

the word “operator” as “any person . . . operating” a facility.” 42 U.S.C. § 9601(20)(A). 

The United States Supreme Court has held that for CERCLA purposes an 

“operator is simply someone who directs the workings of, manages, or conducts the 

affairs of a facility.” United States v. Bestfoods, 524 U.S. 51, 66 (1998). In further 

clarifying that definition, the Court found that such “an operator must manage, direct, or 

conduct operations specifically related to pollution, that is, operations having to do with 

the leakage or disposal of hazardous waste, or decisions about compliance with 

environmental regulations.” Id. at 66-67. 

The Ninth Circuit has made it clear that “operator” liability under CERCLA requires 

active management of the enterprise and/or decision-making authority over the facility’s 

waste disposal operations. See, e.g., Redevelopment Agency of the City of Stockton v. 

BNSF Ry. Co., 643 F.3d 668, 680 (9th Cir. 2011) (affirming the district court’s holding 

that the defendants were not operators because they did not “‘manage, direct, or 

conduct operations specifically related to [the] pollution, that is, operations having to do 

with the leakage or disposal of [the] hazardous waste.’”) (quoting Bestfoods, 524 U.S. at 

66-67); Long Beach Unified Sch. Dist. v. Godwin California Living Trust, 32 F.3d 1364, 

1367 (9th Cir. 1994) (“[A] party must do more than stand by and fail to prevent the 

contamination. It must play an active role in running the facility, typically involving handon, day-to-day participation in the facility’s management.”). 

In interpreting the scope of operator liability under this standard, the Eastern 

District’s decision in United States v. Iron Mountain Mines, Inc., 881 F. Supp. 1432 (E.D. 

Cal. 1995) is particularly instructive. In that case, like the present matter, the United 

States and the State of California brought cost recovery actions under CERCLA. Those 

actions were brought, in part, as a result of acid mine drainage flowing from the site of 

the former Iron Mountain Mine near Redding, California. Id. at 1434. Like Sterling here, 

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one of the potentially responsible parties, Rhone-Poulenc, was a successor to Mountain 

Copper who owned the mine during World War II. In Iron Mountain, however, the 

government did more than simply prohibit gold mining at the site as not essential to the 

war effort. It established a Premium Price Plan as an incentive for the production of 

copper and zinc, secured an agreement from Mountain Copper to sell its entire copper 

and zinc output to the government and controlled marketing and pricing of the ore 

produced at the mine. Id. at 1435-36. Rhone-Poulenc also argued that the government 

was involved in the activities of the mine in numerous respects, including hiring workers, 

building access roads, facilitating shipments, and paying for equipment needed to 

expand ore exploration. Id. at 1449-50. 

Despite these allegations, which entailed substantially more involvement on the 

government’s part that in the case at bar, the Iron Mountain court granted the United 

States’ motion to dismiss, concluding that Rhone-Poulenc had not made any allegations 

that the United States “was involved in the ‘hands-on, day-to-day’ management of the 

mine” or that the government “controlled the cause of contamination, the mining 

equipment, or made any decisions regarding disposal of the mining waste.” Id. at 1450. 

As the court noted, even “[p]urchasing a product and encouraging its production are not 

the same as controlling the cause of the contamination or managing the mine.” Id. 

Significantly for purposes of the present case, the Iron Mountain court later 

analyzed the case on summary judgment since Rhone-Poulenc was allowed to amend 

its complaint after the government’s motion to dismiss was granted. United States v. 

Iron Mountain Mines, Inc., 987 F. Supp. 1277 (E.D. Cal. 1997). In the summary 

judgment phase, Rhone-Poulenc also argued that the government exercised control 

over mining waste due to its construction of a roadway utilizing the waste. Nonetheless, 

the court granted summary judgment in favor of the United States on Rhone-Poulenc’s 

counterclaim, concluding that the government’s wartime efforts to assist, facilitate, and 

provide incentives to Mountain Copper still did not make the government an “operator” 

within the meaning of CERCLA. Id. at 1284. In reaching that determination, the court 

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concluded that Mountain Copper remained in control of all the basic operational 

decisions of the mine and never shared control with the United States. Id. As the court 

observed, the “United States did not participate in ‘day-to-day’ management nor did it 

have the right to do so.” Id. at 1285. 

Here, there is similarly no evidence that the government was involved in any way 

with basic operations at the Lava Cap Mine. If anything, the government’s involvement 

in this case was much less extensive in that it did nothing more than issue and enforce 

Order L-208, which closed the mine as non-essential for the war effort. Other than 

closing the mine pursuant to Order L-208, the government had nothing to do either with 

its operation or the design and disposal of the tailings that resulted from mining 

operations.8

 

While Sterling cites several Third Circuit cases in arguing that the government 

should nonetheless be subject to liability under CERCLA, the government’s actions in 

those cases presented ongoing direct governmental involvement and site-specific 

decision-making absent from the present matter and distinguishable on that basis. FMC 

Corp. v. United States Dep’t of Commerce, 29 F.3d 833 (3rd Cir. 1994), involves the 

government’s efforts to secure high tenacity rayon needed for the manufacturing of warrelated products after the United States lost 90 percent of its crude rubber supply at the 

onset of World War II.9

 The War Production Board accordingly required American 

Viscose to convert its plant from making textile rayon to high tenacity rayon and the 

company did so. Id. at 836. The Board controlled the rayon facility in various ways, 

including ensuring that the plant had sufficient quantities of the products needed to 

manufacture rayon, controlling the labor force at the facility, and placing a representative 

 8

 Sterling’s argument that the government precluded any disposal of mining wastes during the 

period it closed the mine, and thereby should be deemed an “operator” for CERCLA purposes, also 

misses the mark since there is no evidence that the Board knew about the mine’s tailing pile, let alone 

made any decisions pertaining to its disposal. Moreover, to the extent that Sterling relies on L-208’s 

provision generally restricting the removal or “ore or waste” during closure, even that condition was subject 

to the actions needed to keep the facility safe and in good condition. 

9

 High tenacity rayon could be used as a synthetic rubber substitute to strengthen and lengthen 

the life of heavy duty truck and aircraft tires, thus reducing natural rubber consumption. 

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on-site. Id. at 837. The Board also knew that the plant generated hazardous waste. Id. 

at 837-38. Under these circumstances, the FMC court found that the government’s 

actions were sufficient to support a finding of operator liability under CERCLA for 

eventual removal and remediation activities. In so finding, the Third Circuit concluded 

that the government “exerted considerable day-to-day control” over the site, controlled 

what and how much product was manufactured, and “maintained a significant degree of 

control over the production process through regulations, on-site inspectors and the 

possibility of seizure.” Id. at 844.10 No analogous imposition of operational control is 

present here. All the government did was close the mine for the duration of World 

War II. It played no role otherwise in dictating how the mine was operated. 

Sterling’s reliance on another Third Circuit case, Gould Electronics Inc. v. United 

States, 220 F.3d 169 (3rd Cir. 2000) is equally unavailing. There, under facts similar to 

FMC but dissimilar to the present case, the court concluded that the United States was 

an “operator” for CERCLA purposes because it controlled what the plant in question 

“would produce, had access to the plant at all times, reserved the right to dismantle or 

repair the part the plant, reserved the right to shut down the plant, and had the ability to 

exercise day-to-day control over the operations of the plant.” Id. at 182 n.18. 

Significantly, in Gould, the government and the business owner actually entered into a 

contract which provided that the government “retained ultimate supervision and control 

over the day-to-day operations of the plant.” Id. at 174. Obviously, no such 

circumstances are present here. 

Instead, as the Ninth Circuit’s Long Beach Unified case instructs, the passive 

aftermath of the government’s decision to close the mine for two years in the 1940’s is 

insufficient, standing alone, to support operator liability under CERCLA. Instead, 

operator liability requires “an active role in running the facility, typically involving handon, day-to-day participation in the facility’s management.” 32 F.3d at 1367. Here, any 

 10 Sterling has conceded that it is not arguing here that the government’s closure of the Lava Cap 

Mine under Order L-208 amounted to a “seizure” of LCGMC’s property here. Sterling’s Reply, ECF No. 

292, 1:21-23. 

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such role is plainly absent, and the government’s enforcement of L-208 did not, as a 

matter of law, make it an “operator” of the Lava Cap Mine. Consequently, Sterling’s 

counterclaim in that regard fails, and the government is entitled to summary judgment 

that no such liability is present. 

CONCLUSION 

For all the foregoing reasons, the government was not an “operator” of the Lava 

Cap Mine for CERCLA purposes, and its enforcement of Rule L-208 during World War II 

does not give rise to any right of contribution from the government to share in clean-up 

response costs on that basis. Consequently, the United States’ Motion for Summary 

Judgment as to the Counterclaim of Sterling Centrecorp Inc. (ECF No. 274) is 

GRANTED. Sterling’s own Motion for Partial Summary Judgment on the Issue of 

Operator Liability (ECF No. 272), which makes the opposite argument, is DENIED. 

IT IS SO ORDERED. 

Dated: September 20, 2016 

Case 2:08-cv-02556-MCE-DB Document 297 Filed 09/20/16 Page 14 of 14