Court dismissed $4B claim brought by the State of New Mexico against Firm client General Electric.

10/31/06

NM

10th Cir. -- United States Court of Appeals for the Tenth Circuit

Environmental

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Nearly thirty years ago, chemical solvents found in an Albuquerque water supply well were traced to a site where GE and other companies manufactured equipment for U.S. defense agencies.  New Mexico’s environmental regulators pressed the U.S. EPA for cleanup support, and EPA designated the area a Superfund Site.

Under EPA direction, GE built an elaborate groundwater remediation system, which was continually monitored and approved by state regulators and the EPA.  But in 1999 New Mexico’s attorney general bypassed its own environmental authority and hired private counsel under contingency contracts to file state and federal natural resource damage lawsuits.  The attorney general sought more than $4 billion for the alleged contamination of the Middle Rio Grande aquifer, urging that the ongoing remedy was insufficient to avoid the permanent loss of scarce drinking water, even though the state’s own environmental regulators disagreed. 

The action was removed to federal court, where Hollingsworth LLP lawyers, alongside other counsel, crafted more than fifty motions to clarify the state’s claims and set the stage for summary judgment. After an extensive multi-week pretrial and evidentiary Daubert hearing, a U.S. district court judge dismissed all claims.  Hollingsworth LLP lawyers then successfully defended the judgment on appeal.

Plaintiff counsel’s attempt to hijack federal Superfund law was defeated.  The court made clear that states may not bring natural resource damages claims that conflict with an EPA-approved remediation and that any NRD recovery by a state must be used to restore or replace natural resources, not for contingency fees for plaintiff attorneys or to enrich the general treasury.  Other states looking to New Mexico’s action as a precedent took note. 

Hollingsworth LLP’s environmental practice has a long, successful record representing major corporations in defense of actual and anticipated litigation brought by federal and state natural resource trustees.  We understand how actions at one site can have implications, for good or bad, for obligations at many other sites with which a company may be involved.

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